Nvidia Results Beat Estimates; Shares Soar 4 Percent

Shares of Nvidia, the PC chip graphics pioneer, jumped four percent after the chip designer's third-quarter earnings blew past Wall Street estimates.

Nvidia shares jumped to $15.11 in after-hours trading after closing at $14.47.

The company reported third-quarter net income more than doubled to $178.3 million, or 29 cents a share as revenue rose five percent to $1.06 billion, also ahead of estimates.

Analysts expected Nvidia to report third quarter net around 26 cents a share on revenue around $1.06 billion. A year ago, Nvidia reported a net income of $84.9 million, or 15 cents, on revenue of $843.9 million.

Nvidia CEO Jen-Hsun Huang said the Santa Clara, Calif.-based semiconductor designer expects fourth-quarter revenue to be relatively flat, although it could rise as much as two percent. In the year-ago quarter, revenue was $884.6 million.

Huang is expected to discuss results later on Thursday with investors.

The after-market push means Nvidia shares have gained nearly 18 percent since August, although they are off six percent this year.

Founded in 1993 by alumni of semiconductor powerhouses Advanced Micro Devices and LSI, Nvidia engineers designed the graphics processing unit (GPU) now the keystone of computer graphics, and got them designed into most desktops and laptops.

While 60 percent of revenue still comes from the PC market, where growth is easing, Nvidia is going upstream, with its new chips designed into smartphones, workstations and supercomputers.

Huang may provide more details on the impact of the European financial crisis on sales, the impact of Thailand's floods, which have devastated many parts of the electronics sector and prospects for new, higher-end products.

Look for multiple headwinds, said Wedbush Securities analysts Betsy Van Hees, who expects Nvidia's results to match consensus expectations.

Under Huang, 48, Nvidia has moved up the technology chain both with new designs as well as acquisitions. To better compete against Texas Instruments and Qualcomm, the company acquired Britain's Icera for $367 million this year to position itself for the burgeoning smartphone sector.

The purchase provided Nvidia with baseband support needed to run graphics on smartphones. Its Tegra 2 family already is designed into tablets like Motorola Mobility's Xoom and Samsung Electronics's Galaxy Tab.

Last month, Nvidia said it would ship 18,000 Tesla GPUs to the U.S. government's Oak Ridge National Laboratories to enable its Titan supercomputer to perform faster graphics modeling. Because the GPUs handle many applications in parallel, they speed up servers based on older forms of central processing units.

Nvidia chips are now being designed into three of the top five of the top supercomputer platforms, said Steve Scott, chief technology officer. The executive formerly worked for Cray, one of the pioneers in the sector.

CEO Huang had previously estimated Nvidia's third-quarter revenue would range between $ 1.06 and $1.07 billion.

Meanwhile, Nvidia reported its cash pile had increased yet again to $2.7 billion. The money can be used for acquisitions, new products as well as reserving space on the chip foundry lines that assemble all of its products.

The company's market capitalization is $8.74 billion; enterprise value is $6.2 billion.