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Earnings preview: Focus on gaming, datacenter ahead of Nvidia earnings

The semiconductor sector wrapped up the June quarter on a high note, except for a few misses, thriving on the fast-growing datacenter and gaming businesses. When it comes to the quarterly performance of Nvidia (NVDA), the ongoing slump in cryptocurrency remains a cause for concern, considering the company’s relatively bigger exposure to that sector.

In all likelihood, Nvidia will shrug off the crypto blues sand sustain the recent momentum, supported by the other high-growth business segments. Being its fastest-growing target markets, the company needs to ramp up the datacenter and gaming product portfolio with the required intensity. Though the autonomous and electric vehicle market is a promising avenue, production-related complexities continue to be a dampener as far as orders are concerned.

The ongoing slump in cryptocurrency remains a cause for concern, considering the company’s relatively bigger exposure to that sector

Nvidia will be announcing results for the second quarter of 2019 on Thursday after the market closes. Analysts expect that earnings will more than double to $1.66 per share on revenues of $3.11 billion, which represents a 50% growth compared to the year-ago quarter.

The company enjoys the rare distinction of posting above-consensus profit for all the trailing four quarters. In the first quarter, earnings jumped to $1.98 per share aided by broad-based demand growth across all categories.

RELATED: AMD defies crypto blues in Q2

Earlier this week, Nvidia unveiled its advanced Turing architecture and the GPU that carries the technology, offering near real-life lighting effects in graphics, which according to the company is a first in the industry. That followed reports that the company has been doing the groundwork for the closely-followed launch of the GeForce GPU update before year-end.

Among the other chipmakers, Intel (INTC) posted a 78% growth in third-quarter earnings aided by a surge in its data-centric business. California-based Advanced Micro Devices (AMD) staged a turnaround in the most recent quarter and posted adjusted earnings of 14 cents, beating estimates.

RELATED: Intel reports mixed results for Q2

Nvidia’s shares made significant gains over the past 12 months, growing about 62% and crossing the $260-mark. Though the stock dropped soon after opening on Tuesday, it pared the losses as trading progressed and ended the session up 2%.

RELATED: Nvidia Q1 earnings surge, beat estimates

Nvidia first quarter 2019 earnings

Agilent lifts outlook after upbeat Q3 profit

Agilent Technologies (A) reported a 35% jump in earnings for the third quarter as the global pharma and chemical & energy end markets drove the top-line higher. The scientific instrument maker raised the outlook for the full year 2018 after the bottom line exceeded the Street’s expectations.

Net income for the quarter soared 35% to $236 million or $0.73 per share. Adjusted earnings increased by 14% to $0.67 per share.

Revenue grew by 8% year-over-year to $1.2 billion helped by the strength across its business segments.

Looking ahead into the fourth quarter, the company expects revenue to be in the range of $1.24 billion to $1.26 billion, and non-GAAP earnings in the range of $0.72 to $0.74 per share.

For the fiscal year 2018, Agilent lifted revenue outlook to the range of $4.86 billion to $4.88 billion from the previous estimate of $4.85 billion to $4.87 billion. Adjusted earnings guidance was lifted up to the range of $2.69 to $2.71 per share from prior forecast of $2.63 to $2.67 per share.

Agilent Technologies third quarter 2018 earnings
Agilent Technologies Q3 2018 Earnings Infographics

Revenue from Agilent’s Life Sciences and Applied Markets Group for the third quarter rose by 6% year-over-year helped by the strength in the chemical & energy and pharma end markets. Revenue from Agilent CrossLab Group grew 10% as both services and consumables saw strong growth across all end markets and geographies. Revenue from Agilent’s Diagnostics and Genomics Group increased 9% driven by the strength in genomics and China.

During the third quarter of 2018, the company repurchased $243 million in shares, paid $48 million in dividends, and invested $430 million in mergers and acquisitions.

As of July 31, 2018, Agilent has spent more cash in the daily running of the business as the balance sheet showed a 20% dip in cash and cash equivalent from October 31, 2017. Long-term investments have fallen by 49%, while goodwill and other intangible assets rose by 16%.

The company had paid off all of the short-term debt and also reduced long-term debt by 0.1%. An increase in accumulated deficit has dragged total equity lower by 5.5%.

Shares of Agilent ended Tuesday’s regular trading up 1.23% at $66.75 on the NYSE. The stock has fallen more than 3% for the past three months, while it has risen by more than 11% for the past year.

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