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Alberto Abaterusso
Alberto Abaterusso
Articles (2620) 

2 Large-Cap Tech Stocks Announce Earnings

NVIDIA and Applied Materials beat analysts on earnings

May 17, 2019 | About:

These two large technology companies announced quarterly results after the closing bell on Thursday.

NVIDIA Corp. (NASDAQ:NVDA) jumped 1.97% to $163.34 per share in after-hours trading on Thursday after beating consensus estimates on non-GAAP earnings for the first quarter of fiscal 2020 by 7 cents, posting 88 cents per share or 57% down from the prior-year quarter. GAAP earnings were 64 cents per share or 68% lower year-over-year, topping consensus estimates by 7 cents.

Revenue was $2.22 billion, down 30.8%, beating market expectations by $20 million.

The Santa Clara, California-based global visual computing company also recorded a decline of 570 basis points in non-GAAP gross margin to 59%, a 16.2% increase in non-GAAP operating expenses to $753 million and a 55.4% tumble in the free cash flow to $592 million.

For the second quarter of fiscal 2020, NVIDIA guided for revenue between $2.5 billion and $2.6 billion versus estimates of $2.54 billion. The company also expects a non-GAAP gross margin of 59.5% and non-GAAP operating expenses of $765 million.

The stock was $160.2 per share at close on Thursday for a market capitalization of $97.47 billion. NVIDIA Corp. climbed 20% so far this year, in line with the Nasdaq. The closing price on Thursday was 28.7% above the 52-week low of $124.46 and 82.7% from the 52-week high of $292.76.

Shares of Applied Materials Inc. (NASDAQ:AMAT) soared 6.1% to $44.20 in after-hours trading on Thursday after beating consensus estimates on non-GAAP earnings for the second quarter of fiscal 2019 by 4 cents, posting 70 cents per share, which was down 41% year-over-year.

GAAP earnings were also 70 cents per share, topping consensus estimates by 5 cents.

Revenue decreased 22.7% to $3.54 billion, beating expectations by $60 million.

The Semiconductor Systems segment fell 24.7% to $2.184 billion, the Applied Global Services segment increased 4.1% to $984 million and the Display and Adjacent Markets segment tumbled 51.6% to $348 million.

The Santa Clara, California-based provider of equipment, services and software to the semiconductor industry also posted a 240 basis-point decrease in non-GAAP adjusted gross margin to 43.5% and 690 basis-point decrease in non-GAAP operating margin to 22.4%.

Applied Materials expects to report revenue of $3.375 billion to $3.675 billion and non-GAAP earnings per share of 67 to 75 cents for the second quarter of fiscal 2019. Analysts predict non-GAAP earnings of 69 cents per share on revenue of $3.51 billion.

Shares of Applied Materials closed at $41.7 on Thursday for a market capitalization of $39.55 billion. The stock has risen 27% year to date, surpassing the Nasdaq by 7%. The closing price on Thursday was 44.8% above the 52-week low of $28.79 and 27.6% below the 52-week high of $53.23.

Disclosure: I have no positions in any security mentioned.

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About the author:

Alberto Abaterusso
I am a contributor at GuruFocus. I primarily write about how to pick potential value stocks. Gold, silver and precious metals mining industries is also my cup of tea. My articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. I hold a Master\\\'s Degree in Business Administration from Università degli Studi di Bari (Italy), Aldo Moro. I am based in The Netherlands.

You can follow me on Twitter at https://twitter.com/AAbaterusso

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