) has extended its 2004 share repurchase plan and initiated a
quarterly cash dividend.
The company had announced that it would extend its existing
$2.7 billion share-repurchase program to December 2014. Under the
existing program, Nvidia has so far bought back 90.9 million
shares for $1,46 billion, representing an average share price of
$16 per share. Thus the company is paying a premium of 30%-31% to
its current share price.
The working capital will be used by the company for this
repurchase. The company has a cash and cash equivalent balance of
In its fourth quarter 2013 guidance, the company also declared
that it was initiating the payment of a quarterly cash dividend.
Moreover, Nvidia took a step in the right direction last week.
The company has taken a decision to initiate a quarterly dividend
of 7.5 cents per share, and will extend the share repurchase
authorization to the end of 2014.
The company expects revenue to be in the range of $1.025
billion and $1.175 billion. GAAP and non-GAAP gross margins are
expected to be remain flat sequentially at 52.9% and 53.1%,
During the third quarter, the company witnessed strong demand
for the company's Kepler GPU products and shipments of new
Kepler-based Tesla products improved sequentially.
On the other hand, NVIDIA's performance may be slightly
hampered by the economic slowdown in Europe. Moreover, advanced
chips developed by
Advanced Micro Devices Inc.
) may increase competition for the company.
Currently, NVIDIA has a Zacks #3 Rank (short-term Hold).
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