PINS and NVDAs…. and Applied Materials

Pinterest PINS 32.31 +0.30 +0.95% is down big this morning after issuing weaker than expected guidance on future revenue. The company expects 2019 revenue of $1.055 billion to $1.080 billion. The estimates were for $1.09 billion. They did beat on current revenue, but I guess missed on earnings… they reported a loss of $0.33 per share on revenue of $201.9 million. The consensus estimate was a loss of $0.09 per share on revenue of $201.7 million. When you’re losing money the only thing investors care about is that revenue increase, and they’re not hitting that either.

Nvidia

Nvidia NVDA 158.84 +10.07 +6.77% reported great earnings.

Nvidia (NVDA) reported 1st Quarter April 2019 earnings of $0.88 per share on revenue of $2.2 billion. The consensus earnings estimate was $0.79 per share on revenue of $2.2 billion. Revenue fell 30.8% compared to the same quarter a year ago.

The company said it expects second quarter revenue of $2.50 billion to $2.60 billion, with gross margins of 59.0% to 60.0%, which calculates to earnings of $1.08 to $1.22 per share. The current consensus earnings estimate is $1.11 per share on revenue of $2.58 billion for the quarter ending July 31, 2019.

Well… better than expected. Falling revenue and a decent amount of China exposure will keep me on the sidelines for now. They are IMO one of the companies of the future. They slid sideways into AI with their pumped up video chips that happen to also be great for blockchain. Two monster future potential. The concern with AI is the political incentive to limit US companies selling to other countries. If the government suddenly decides to block tech companies from selling to China, we may see about a 20% cut to Nvidia’s revenue.

Nvidia was up about 7% after the report, was trading down premarket and is up a bit now that the market has opened. Not what I would expect from a good earnings report.

Applied Materials

Applied Materials AMAT 46.50 -0.66 -1.40% on the other hand, is getting a nice pop today on a decent report last night.

AMAT reported 2nd Quarter April 2019 earnings of $0.70 per share on revenue of $3.54 billion. The consensus earnings estimate was $0.66 per share on revenue of $3.49 billion. Revenue fell 22.5% compared to the same quarter a year ago.

The company said it expects third quarter earnings of $0.67 to $0.75 per share on revenue of $3.375 billion to $3.675 billion. The current consensus earnings estimate is $0.70 per share on revenue of $3.57 billion for the quarter ending July 31, 2019.

AMAT supplies equipment, services and software to enable the manufacture of semiconductor chips. As this company goes, so goes the semiconductor business. Apparently it is doing okay.