CALIFORNIA: Chip maker Nvidia Corp. said its third-quarter profit rose 42%, propelled by demand from personal-computer users who want to play videogames with flashy images.
The company’s revenue and profit came in well over Wall Street expectations, and the company also announced an 18% increase in its quarterly dividend. Nvidia’s shares jumped 9% in after-hours trading.
Nvidia, based in Santa Clara, Calif., makes chips called graphics processing units used in tasks such as displaying animated scenes in game software. Demand from gamers recently has remained strong despite a slowdown in the overall PC market.
Revenue from gaming rose 44% to $761 million in the quarter ended in October, the company said.
“PC gaming is our biggest business,” Jen-Hsun Huang, Nvidia’s chief executive, said in an interview. “When it grows, it really grows.”
Demand has been particularly strong in developing countries where sports games are gaining in popularity, Mr. Huang said.
The company is applying its technology to several other markets, including chips that generate images for auto dashboards and are used in navigation systems. Revenue from the auto segment rose 52% to $79 million in the third period, the company said.
Two other businesses—chips for workstations and those used in data centers––declined in the period.
In the period ended Oct. 25, Nvidia said its net income came to $246 million, or 44 cents a share, compared with $173 million, or 31 cents a share, a year earlier. Revenue rose 6.5% to $1.305 billion.
After adjustments, Nvidia said net income came to 46 cents a share. Analysts had expected earnings on that basis of 35 cents a share on revenue of $1.18 billion, according to FactSet.
For the current quarter, Nvidia said it expects to post revenue of $1.3 billion, plus or minus 2%. Analysts polled by Thomson Reuters had projected $1.21 billion.
