Q4 Preview: NVIDIA (NVDA) HDD Issues to Continue into Q1, Say Analysts

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NVIDIA Corp. (Nasdaq: NVDA) shares are trading just about flat Wednesday heading into its fourth-quarter earnings report, expected out after the market closes.

Analysts on the Street currently expect earnings to fall 35 percent to 19 cents per share on revs of $950.5 million.

Shares of NVIDIA moved slightly lower to $14.77 through the quarter, and are up 10 percent since. NVIDIA has traded within the range of $11.47 to $26.01 over the last year.

Investors might take a peek at AMD's ( AMD ) quarterly numbers, issued in late January, which showed the chipmaker topped earnings expectations but missed on the top-line. AMD did bolster margins by about 1 point to 46 percent overall.

Bloomberg data shows 14 analysts with a Buy rating on NVIDIA, 18 at Hold, and two maintaining a Sell. The analyst price target average is $16, with a low of $11 and high of $24.

Analyst Comments

  • Goldman Sachs is looking for EPS of 22 cents and revs of $953.7 million. The firm is looking for NVIDIA to report in-line with it's Jan. 24th negative pre-announcement; guidance should come in below Street views. On the outlook, Goldman sees HDD constraints on top of negative seasonality.

    On the negative pre-announcement in January, Goldman considered two main factors: "(1) lower demand for mainstream GPUs due to HDD shortages at PC OEMs related to the flooding in Thailand, and (2) greater-than-expected declines in Tegra 2 ahead of the ramp of Tegra 3 in 1QCY."

    Looking to the next quarter, channel checks by Goldman suggest Tegra 3 is unlikely to ramp in the April quarter.

  • Deutsche Bank is looking for revs of $950 million and EPS of 20 cents. Deutsche sees about 3 percent of sequential growth for the Professional Solutions segment and a 15 percent drop in revs at GPU and Consumer segments.

    For the next quarter, Deutsche commented, "While we expect continued growth in the Professional Solutions segment (+2% q/q), we expect the GPU segment to face seasonal and Thai-flood related headwinds yet again. We note that the two primary PC CPU vendors guided 1Q revs to fall roughly -8% q/ q, slightly worse than normal seasonality to reflect the continued headwind from the Thai flood HDD shortages."

  • JPMorgan sees EPS of 32 cents in the quarter. The firm maintains a Neutral rating and $16.50 price target.
Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release. You can also check out NVIDIA's past performance at Streetinsider's NVIDIA's Income Statement .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: AMD , NVDA

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