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Nvidia adds $1B to buyback plan, shares now +2.8% AH (NVDA)

  • Along with its FQ3 results, Nvidia (NVDA) has announced it's adding another $1B to its buyback authorization; the chipmaker now has $1.286B available for buybacks. Nvidia bought back $750M worth of shares earlier this year through a deal with Goldman.
  • After rising 7.5% Y/Y in FQ2, Nvidia's GPU division sales fell 2% in FQ3 to $876.8M, as strong Quadro (workstation) and Tesla (server/HPC) GPU sales failed to fully offset PC weakness. Nvidia says GPU sales for PC "gaming platforms" (a high-margin business) remains healthy, but that entry-level notebook GPU shipments fell.
  • Tegra division sales totaled $111.2M, up 111% Q/Q thanks to the Tegra 4 ramp and Shield console sales, but down 54% due to tough direct competition from Qualcomm, and tough indirect competition from Apple/Samsung's in-house app processors.
  • Gross margin was 55.7%, -60 bps Q/Q and +260 bps Y/Y. GM is expected to slip to 54.5% in FQ4. In spite of a 12.5% Y/Y rev. drop, opex rose 17.6% Y/Y, due largely to a 20% increase in R&D spend to $340.3M (32% of revenue).
  • FQ3 results, PR, CFO comments (.pdf)
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