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Nvidia profit quadruples

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CIOL Bureau
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Reed Stevenson

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SEATTLE: Nvidia Corp., the world's largest graphics-chip maker, said that its quarterly profit quadrupled as it pared back costs and sold more chips and hardware than its rivals.

Shares in Nvidia jumped more than 8 percent after the Santa Clara, California-based company reported a net profit of $25.9 million, or 15 cents per share, in the fiscal third quarter ending Oct., compared with a year-earlier profit of $6.4 million, or 4 cents per share.

Analysts had, on average, expected Nvidia to post a profit of 9 cents per share in the third quarter, according to forecasts compiled by Reuters Estimates.

Revenue rose to $515.6 million from $486.1 million a year earlier. Analysts had expected $512.8 million in revenue.

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Nvidia shares jumped to $16.70 in after-hours trading from their Nasdaq close of $15.41. That's also a sharp recovery from lows below $10 seen three months ago, just after the company reported disappointing earnings for the second quarter.

David Wu, an analyst at Wedbush Morgan Securities, said Nvidia appeared to have recovered from its dismal performance in the second quarter.

"Last quarter everything that could go wrong, went wrong," Wu said. "They're controlling their costs and any incremental revenue is going to go to the bottom line."

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Nvidia chief executive Jen-Hsun Huang said the strong quarterly results reflected the company's "strategy to re-capture the technology leadership position."

For the fiscal fourth quarter until the end of January, Nvidia said it expects to post revenue "flat to slightly higher" compared with the third-quarter revenue.

The company also said it would continue to keep a lid on costs, with its gross margin seen improving by 1 percentage point in the fourth quarter from the 32.3 percent margin in the latest quarter.

Analysts are projecting Nvidia will post a fourth quarter per share profit of 10 cents on $501.5 million in revenue.

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Company executives said Nvidia was also posting better sales performance for its next-generation high-end chips such as its GeForce graphics processors.

Nvidia's shares took a hit over the summer on fears of market-share losses to Intel Corp. and ATI Technologies Inc. Since then, Nvidia appears to have regained its footing, analysts said.

The company said it expects to ramp up business for its high-end 6800 line of graphics processors and graphics chips for cell phones.

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