Nvidia Bucks Slowdown in Personal Computers Sales to Post Strong Second-Quarter Results
Nvidia Corporation bucked a slowdown in sale of personal computers and posted strong second-quarter results. The results announced by Nvidia were a clear indication that the enthusiasts are now upgrading their existing computers with chips that generate more lifelike images.
The Silicon Valley-based company said the revenue generate by its GeForce graphics processors grew 51%. Total revenue came in higher than the company had projected, sending Nvidia shares up more than 10% to $22.60 in after-hours trading.
Nvidia sells a part of its graphic chips, known as GPUs, to computer makers for inclusion in new models. But its demand has been stronger for high-end chips incorporated on cards that plug into desktop computers.
Jen-Hsun Huang, Nvidia's chief executive in an interview said that the upgrade rate is increasing. Customers are opting for upgrade because of the steady arrival of new videogames that require faster hardware to run at full visual capacity, Mr. Huang said.
Buyers want to take advantage of new 4K displays and online gaming services that are turning into full-fledged social networks, he said.
Nvidia said it would wind down its Icera wireless modem business, triggering restructuring charges of about $100 million to $125 million. The company said that it was open to a sale of the technology or operations, but on Thursday it said that they failed to find a viable buyer.
The company's shares rose nearly 10 percent in extended trading on Thursday. Nvidia's revenue increased 4.5 % in the quarter ended July 26, while analysts were expecting on average decrease of about 8 %.