NVIDIA took a closer look at the metrics for the second quarter of fiscal 2022. Accordingly, the company expects total sales of 6.7 billion US dollars for the second quarter. That would be an increase of three percent year-on-year – but a decrease of 19 percent compared to the previous quarter. Previously, NVIDIA had expected total proceeds of $8.1 billion. This is particularly evident in the gaming sector. Here, revenues are likely to be around a third lower than in the same quarter of the previous year.
Reasons for the drop in sales in the gaming sector
The main trigger was a significant decline in the gaming business, in which Nvidia is strong with graphics cards. The division’s revenue of $2.04 billion fell by a third compared to the same quarter last year and by 44 percent in three months. Nvidia justified this trend with the weak economy. Concerns about the economy and high inflation mean that consumers are frugal. In view of the expected further weakness in demand, Nvidia wants to write down 1.32 billion dollars on inventories.
As CEO and founder of NVIDIA, Jensen Huang, stated in the official announcement, the sales forecast for gaming products had already fallen significantly during the quarter. “As we expect the macroeconomic conditions affecting sell-through to continue, we have taken steps with our gaming partners to adjust channel pricing and inventory,” said Huang. CFO Colette Kress, on the other hand, also blames the increased costs, for example for components, for the lower sales outlook.”
Nevertheless, the NVIDIA executive floor is not discouraged. “We have slowed operating expense growth, balanced investments for long-term growth while managing near-term profitability. We plan to continue share buybacks as we anticipate strong cash generation and future growth,” said the Chief Financial Officer.
The data center business, meanwhile, grew revenue to $3.81 billion, up 61 percent year-on-year and up 1 percent quarter-on-quarter.
However, the exact figures will not be presented until August 24, when management will also answer questions from investors and analysts.
On the NASDAQ, the NVIDIA share reacted with a temporary price slide of 7.93 percent to 174.83 US dollars.
Editorial office finanzen.net / (dpa-AFX)
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