SANTA CLARA, Calif. (AP) — Nvidia Corp.'s third-quarter earnings climbed 17 percent as the rapidly growing smartphone and tablet computer markets fueled demand for its graphic processing chips.
The results announced Thursday exceeded analyst projections. Nvidia signaled its confidence in its future prospects by committing to pay the first quarterly dividend in the company's 19-year history.
The dividend will start at 7.5 cents per share, or 30 cents per share annually. That translates into a yield of 2.4 percent, based on a Thursday close of $12.68 for Nvidia's stock.
Intel Corp., the world's largest chip maker, currently pays a dividend that yields 4.3 percent annually based on the company's current stock price.
Nvidia, which is based in Santa Clara, Calif., also extended a commitment to spend $2.7 billion buying back its own stock. The company has spent nearly $1.5 billion so far to buy back nearly 91 million shares. At the end of the third quarter, Nvidia had $3.4 billion in cash. Paying the new dividend will cost the company about $190 million annually.
Both the dividend and the commitment to keep buying back stock represent an attempt to boost Nvidia's shares, which are 25 percent below their 52-week high of $16.90 reached in February.
Nvidia's stock gained 12 cents in extended trading after the company disclosed its quarterly results and its plans to funnel more money to its shareholders.
The company earned $209 million, or 33 cents per share, during the quarter ending Oct. 28. That compared to net income of $178 million, or 29 cents per share, at the same time last year.
Revenue increased 13 percent from last year to $1.2 billion. The biggest gains came in Nvidia's consumer products division, led by shipments of a new processing chip for smartphones and tablets. Sales in the consumer products division jumped 28 percent from the same time last year, according to Chief Financial Officer Karen Burns.
Analysts surveyed by FactSet had expected Nvidia to earn 30 cents per share on revenue of $1.19 billion.
Nvidia forecast revenue of $1.02 billion to $1.18 billion in the fiscal fourth quarter ending in late January. Analysts have forecast revenue of $1.2 billion for the current quarter.