Nvidia Expects $100M Revenue Hit From Coronavirus
'While the ultimate effect of the coronavirus is difficult to estimate, the company has reduced its revenue outlook for the first quarter of fiscal 2021 by $100 million to account for its potential impact,' the company says in a new statement.
Nvidia said it expects to take a $100 million hit in revenue next quarter due to the impact of the coronavirus outbreak.
The remarks were included in the Santa Clara, Calif.-based company's earnings release on Thursday for the fourth quarter of its 2020 fiscal year.
"While the ultimate effect of the coronavirus is difficult to estimate, the company has reduced its revenue outlook for the first quarter of fiscal 2021 by $100 million to account for its potential impact," the company said in a statement.
As a result of the lower revenue forecast, the company said it expects revenue in the first quarter of its fiscal 2021 year to be $3 billion, plus or minus 2 percent.
However, Nvidia's overall results appeared to please investors.
The chipmaker's stock price was up more than 6.40 percent in after-hours trading Thursday after reporting results for the fourth quarter that surpassed Wall Street's expectations.
Nvidia's fourth-quarter revenue was $3.1 billion, a 40.7 percent increase from the same period last year and $130 million higher than what analysts had hoped to see. The company's net earnings were $1.89 cents per share, beating analyst estimates by 22 cents.
"Adoption of Nvidia accelerated computing drove excellent results, with record data center revenue," Jensen Huang, founder and CEO of Nvidia, said in a statement. "Our initiatives are achieving great success."
Coronavirus, now known as Covid-19, has infected more than 60,000 people, according to CNN, while the death toll in China has reached 1,367. And it has already disrupted the tech industry in multiple ways, from the cancellation of Mobile World Congress in Barcelona to iPhone production constraints.
Marc Fertik, vice president of technology solutions at Elk Grove Village, Ill.-based Ace Computers, an Nvidia system builder partner, said with many hardware systems relying on subcomponents made in China, the impact of coronavirus will be felt across the industry.
"It's going to hit everybody next quarter. It's going to slow down deliveries," he said. "There are certainly some items I know that are going to lag."