Today's stock market
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All the major sectors were up today, with materials rebounding from recent weakness; the SPDR S&P Metals and Mining ETF (NYSEMKT:XME) jumped 1.5%. Semiconductor stocks were one of the few areas of market softness, with the iShares PHLX Semiconductor ETF (NASDAQ:SOXX) falling 0.8% on investor concerns over some earnings reports this week.
NVIDIA's growth continues despite loss of cryptocurrency sales
NVIDIA reported strong growth in the second quarter, but gave guidance for the next quarter that was below expectations, and shares dipped 4.9%. Revenue grew 40% to $3.12 billion and earnings per share soared 91% to $1.76. Analysts were expecting the GPU specialist to earn $1.66 per share on sales of $3.1 billion.
Sales grew across all of NVIDIA's market platforms. Gaming revenue, NVIDIA's largest market, grew 52% to $1.82 billion. Data center revenue jumped a whopping 83% to $760 million, while revenue to the professional visualization and automotive markets grew 20% and 13%, respectively. Gross margin was 63.5%, up from 58.6% in the period a year ago, but down 1.2 percentage points from last quarter.
Looking forward, NVIDIA expects Q3 revenue to be $3.25 billion, plus or minus 2%, below expectations for $3.3 billion, and said gross margin will slip to 62.8%. The company said that revenue from cryptocurrency mining, which had been boosting gross margin above what it considered a normal rate, will drop to zero.
NVIDIA is introducing new chips based on its eighth-generation GPU architecture, called Turing, which should boost gaming and visualization sales for years to come, but the market was more focused on the loss of cryptocurrency revenue.
Nordstrom's digital strategy is paying off
Nordstrom defied market concerns about department stores, reporting sales and profit in the second quarter that beat expectations, causing shares to soar 13.2%. Revenue increased 7.2% to $4.07 billion, while analysts had expected $3.96 billion. Earnings per share came in at $0.95, well above the analyst consensus of $0.84.
Comparable sales rose 4%, with strength in both full-price store sales, up 4.1%, and off-price, up 4%. Digital sales accelerated, growing 23% in Q2 and now accounting for 34% of sales, up from 29% in the period a year ago. Gross margin was 35%, an improvement of 91 basis points over last year.
Looking forward, Nordstrom raised its full-year outlook for sales and profit. It now expects net sales to be between $15.4 billion and $15.5 billion, up from a range of $15.2 billion to $15.4 billion. Guidance for EPS was raised to $3.50-$3.65, compared with the earlier estimate of $3.35-$3.55.
After a failed attempt at a leveraged buyout, Nordstrom has focused on aspiring to be "the best fashion retailer in a digital world." A successful Anniversary Day sale, strong sales of strategic brands, and improved inventory management boosted results and had investors cheering today.