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Earnings Results: Nvidia sales hit a record again amid chip shortage, and the earnings outlook suggests more on the way

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Nvidia Corp. broke several quarterly sales records and forecast revenue growth as much as $1 billion above Wall Street estimates for the current quarter Wednesday, as the gaming specialist continues to deliver record results amid a chip shortage.

Nvidia
NVDA,
+0.33%

reported first-quarter net income of $1.91 billion, or $3.03 a share, compared with $917 million, or $1.47 a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items, were $3.66 a share, compared with $1.80 a share in the year-ago period.

Revenue soared to a record $5.66 billion, up 84% from $3.08 billion in the year-ago quarter. In April, Nvidia upped its forecast to be trending above its $5.3 billion forecast, compared with February when the company offered a range of $5.19 billion to $5.41 billion. In the previous quarter, which included holiday sales, sales topped $5 billion for the first time, even as global chip supply shortages and high demand hampered sales across the industry.

Read: The semiconductor shortage is here to stay, but it will affect chip companies differently

Analysts surveyed by FactSet had estimated adjusted earnings of $3.29 a share on revenue of $5.4 billion. Shares fluctuated between slight gains and declines after hours, and were last down 0.6%, following a 0.3% rise in the regular session to close at $628.

Gaming sales rallied 106% to a record $2.76 billion, surpassing the previous high mark of $2.5 billion, while analysts surveyed by FactSet had expected Nvidia gaming sales of $2.72 billion. Nvidia has worked to deter cryptocurrency miners from using its gaming chips for mining rigs. Early in the first quarter, the company launched a chip designed for cryptocurrency mining, sales of the so-called CMP chips came in at $155 million.

More recently, Nvidia said it would tweak the performance of its new gaming cards to make them specifically less attractive to miners. While cryptocurrencies like bitcoin
BTCUSD,
+0.09%

and ethereum
ETHUSD,
+0.17%

are off about 40% from their recent records, they’re still trading at eye-popping gains, compared with a year ago.

On the data-center side, sales surged 79% to a record $2.05 billion from the year-ago period, while analysts expected sales of $2 billion.

“Our data center business continues to expand, as the world’s industries take up Nvidia AI to process computer vision, conversational AI, natural language understanding and recommender systems,” Chief Executive Jensen Huang said in a statement. “We continue to make headway with our planned acquisition of Arm, which will accelerate innovation and growth for the Arm ecosystem. “

For the second quarter, Nvidia forecast revenue of $6.17 billion to $6.43 billion, while analysts had forecast revenue of $5.47 billion on average.

Read: Worldwide chip shortage expected to last into next year, and that’s good news for semiconductor stocks

Amid supply shortages, the chip industry has consistently turned in strong earnings this season, with Advanced Micro Devices Inc.
AMD,
+0.62%

faring better in the data-center space than Intel Corp.
INTC,
+0.09%
,
while Qualcomm Inc.
QCOM,
-0.49%

topped Street expectations following a series of downgrades.

Over the past 12 months, Nvidia shares have climbed 80%, while the PHLX Semiconductor Index
SOX,
+0.20%

has gained 73%. Meanwhile, the S&P 500 index
SPX,
+0.19%

rose 40%, and the Nasdaq Composite Index
COMP,
+0.59%

gained 47%. The company recently announced its first stock split in 14 years after massive gains. Nvidia shares last closed at a record high on April 15 at $645.49.

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