Semiconductor firm Nvidia Corporation (NASDAQ: NVDA) reported lower earnings and revenues for the second quarter. The results, however, topped the Street view. The stock moved up about 6% during Thursday’s after-hours session, following the announcement.

Adjusted earnings came in at $1.24 per share in the second quarter, a decrease of 36% from the corresponding period of last year. Wall Street analysts had forecast a lower number. Unadjusted profit was $552 million or $0.90 per share, compared to $1.1 billion or $1.76 per share a year ago.

Nvidia Q2 profit, revenue drop but beat estimates; stock gains 6%

Dragging down the bottom-line, revenues dropped 17% year-over-year to $2.58 billion during the quarter, which however exceeded the market’s projection. The weakness in the top-line reflects the ongoing slump in the GPU and data-center businesses.

Jensen Huang, CEO of Nvidia, said, “We achieved sequential growth across our platforms. Real-time ray tracing is the most important graphics innovation in a decade. Adoption has reached a tipping point, with NVIDIA RTX leading the way.”

Also see: NVIDIA stock surges on Q1 earnings beat

Looking ahead to the third quarter, the management expects revenues of $2.90 billion, plus or minus 2%. Adjusted gross margin is expected to be 62.5%, plus or minus 50 basis points. Adjusted operating expense is forecast to be approximately $765 million.

nvidia stock
Image by JacekAbramowicz on Pixabay

The company said it will pay the next quarterly cash dividend of $0.16 per share on September 20, 2019, to all shareholders of record on August 29, 2019.  It will resume repurchasing stocks after the completion of the recently announced acquisition of Mellanox Technologies, which is the first priority as far as capital spending is concerned. The regulatory approval process for the transaction is progressing as planned. It is expected to close by the end of this calendar year.

Related: Nvidia Q1 2020 Earnings Conference Call Transcript

Nvidia’s shares are yet to fully recover after falling from the peak more than a year ago. The stock gained about 10% since the beginning of the year but continues to underperform the semiconductor index of S&P. It closed Thursday’s regular trading session lower but gained sharply during the extended session.

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