Earnings Preview: Nvidia

| About: NVIDIA Corporation (NVDA)

Nvidia (NASDAQ:NVDA) is expected to report Q2 earnings after the market close on Thursday, August 9, with a conference call scheduled for 5:00 pm ET.


The consensus estimate is 14c for EPS and $1.01B for revenue, according to First Call. For Q2, revenue is expected to be in the range of $990M-$1.05B, whereas gross margin is projected to be 51.2%, plus or minus 1%. Operating expense is expected to be $418M. The company also expects depreciation and amortization in the range of $55.M-$57M and capital expenditures in the range of $35M-$45M. Diluted shares are expected to be roughly 628M. Nvidia shares have been climbing higher in recent weeks, due in part to enthusiasm over the Tegra 3 mobile processor to be used in next generation smartphones and tablets.

Analyst Views

RBC Capital expect in-line Q2 results, which could be better than buy-side expectations. RBC expects Tegra revenues to grow 50% year-over-year as the firm believes Tegra is a strong play on resumption of handset builds in 2H of CY12. The concern is that the good news may already be priced in the stock price, with the shares up more than 20% off the June lows -- and many of its peers have issued more tepid guidance in response to the softer macro backdrop. The forward outlook will therefore draw close scrutiny. Most analysts think investors should stand pat on Nvidia, with 17 of 31 analysts rating it a Hold.