Shares of Nvidia declined more than 4 percent in extended trading after the company issued quarterly results that fell below Wall Street estimates. The company had, however, warned two weeks ago that it would miss estimates stating that growth had slowed as a result of reduced gaming sales induced by macroeconomic conditions.
The company reported adjusted earnings per share of $0.51 compared to the expectation of $1.26. Revenue of $6.7 billion fell below the expectation of $8.10 billion.
The company expects revenue of $5.9 billion for its fiscal third quarter while analysts expect $6.95 billion, according to Refinitiv.
The company reported a 33 percent year-on-year revenue decline to $2.04 billion. It blamed lower sales of its gaming products for this decline. “Macroeconomic headwinds across the world drove a sudden slowdown in consumer demand” for the company’s gaming products, Nvidia Chief Financial Officer Colette Kress said while on a call with analysts. The company, however, stated that it would review prices with its retailers to address the challenging market conditions as it expects these challenges to continue in the current quarter.
Its data center business experienced a 61 percent year-over-year increase to $3.8 billion. Nvidia said this was driven by “hyperscale” customers or big cloud providers.
The company’s professional visualization business which entails graphic chips for enterprise uses dropped 4 percent year-over-year to $496 million. Its automotive segment increased 45 percent year-on-year to $220 million. Revenue from its dedicated cryptocurrency chips, CMP, contributed a 66 percent year-on-year decrease to its OEM and Others category.
Earlier in May, the company announced that it would be slowing hiring to deal with the current macroeconomic realities. Many companies across the globe had to either reduce their workforce or slow hiring as a strategy to address the ongoing macroeconomic challenges.
Nvidia’s stock is down more than 42 percent since this year.