Graphics and mobile chip kingpin Nvidia posted unexpectedly solid results for the second quarter of its fiscal 2016 on Thursday and said it projected next quarter's numbers to be strong, as well.
Total revenue for the three months ending on July 26 was $1.15bn, which trounced even Wall Street's most optimistic expectations.
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The AMD-bothering company similarly posted earnings of $0.34 per diluted share, while the analysts were expecting around $0.10 per share, on average.
"Our strong performance in a challenging environment reflects NVIDIA's success in creating specialized visual computing platforms targeted at important growth markets," Nvidia CEO Jen-Hsun Huang said in a statement.
By that he meant things like virtual reality, 4K video systems, in-car infotainment systems and self-driving cars, and GPU acceleration for the data center.
Not every aspect of Nvidia's business worked out equally well in the quarter, though. Sales of the company's Tegra CPUs for mobile devices were down 7.9 per cent from the same period a year ago, with the division posting revenue of $128m.
Nvidia has said it plans to get out of the mobile chips business, where it has lagged behind competitors, and that it will focus instead on gaming, automotive, and cloud applications.
Sales of graphics processing chips brought in $959m in the second quarter, which was up 4.5 per cent annually.
But net income was down – way down – at just $26m, an 81 per cent year-on-year decline that reflected a number of expenses.
For one thing, Nvidia is still in the process of writing down its Icera wireless modem business, which in May it said it would scrap after failing to find a buyer for it. It ate $103m in restructuring and other charges in Q2 related to that wind-down, and it said it expects to write down another $15m to $25m in the third quarter.
The chipmaker also paid out $24m in legal fees related to its ongoing patent litigation against Qualcomm and Samsung, the first such lawsuits in its history as a company.
In her commentary on the results, however, Nvidia CFO Colette Kress said to expect strong revenue again next quarter, along with slightly higher gross margins.
That seemed to suit investors just fine, and they boosted the company's share price by nearly 9 per cent in extended trading on the news. ®