Nvidia (NASDAQ:NVDA) Misses Big on Revenue, Profits and Guidance Strong

Revenue for Nvidia (NASDAQ:NVDA) plunged almost 10 percent in the fiscal fourth quarter of the company, dropping 9.8 percent to $886 million. The company had estimated revenue growth to rise by 3 percent to 5 percent.

Earnings for the quarter were stronger, rising to $171.7 million, or 29 cents a share, up from $131.1 million, or 23 cents a share in the same quarter last year. Those figures include a gain of 6 cents a share from the deal with Intel. Even so, they still would have beat analysts' expectations of 14 cents a share.

The Intel agreement is a reference to Intel agreeing to pay Nvidia $1.5 billion over a five-year period to license its graphics technology.

Guidance was strong from the company, as Nvidia said sales should increase 6 to 8 percent from the fourth quarter to the first quarter, which would generate revenue of $940 million to $957 million. Analysts are looking for revenue of $889 million.

Margins are also looking good, with a estimated range of 48.5 to 49.5 percent for the fiscal first quarter. That's a little above the 48 percent expected by analysts.

Operating expenses are taking off though, as Nvidia expects it to rise by 33 percent this quarter over last quarter, citing the hiring of more engineers to offer more product support. Also cited was as a reason for higher operating expenses is compensation expenses rising from the higher-priced company stock.

Gleacher & Company analyst Doug Freedman has some concern there, saying, "Operating expenses seems to be growing faster than revenues and incremental gross margins are not strong, if we remove the impact from Intel payment."

Shares of Nvidia are up over 50 percent since January 1, 2010.

Nvidia closed Wednesday at $23.38, gaining $0.38, or 3.68 percent. In after hours trading it dropped to $23.33, down $0.05, or 0.21 percent.