UPDATE 2-Nvidia Q4 revenue estimate beats Street, shares rise

SAN FRANCISCO, Nov 5 (Reuters) - Graphics chipmaker Nvidia Corp forecast better-than-expected fourth-quarter revenue on the back of increased consumer spending, and its shares rose nearly 6 percent. Nvidia expects fourth-quarter revenue to be up about 2 percent from the third quarter, well above Wall Street's expectations. The chip sector as a whole has been lifted by increased consumer demand, particularly during the previous quarter's back-to-school shopping season. That has helped tech heavyweights such as Intel Corp and Apple Inc post earnings well above Wall Street expectations. "Our growth was almost across every segment of our business," Nvidia Chief Financial Officer David White told Reuters in an interview, adding that most of the company's growth came from consumer spending. "We have seen a recovery in our industries that was beyond our expectations, and certainly exceeded what we planned for." Nvidia, which competes with Advanced Micro Devices' ATI unit to sell graphics hardware for computers, said third quarter net income rose to $107.6 million, or 19 cents a share, from $61.7 million, or 11 cents per share in the year ago period. Excluding items, earnings were $110.3 million, or 19 cents a share, compared with $111.4 million, or 20 cents a share. That exceeded the average analysts' estimate of 10 cents a share, according to Thomson Reuters I/B/E/S. Revenue rose to $903.2 million from $897.7 million. Analysts has expected $838.1 million. Nvidia's forecast for a 2 percent sequential rise for revenue in the fourth quarter also surpassed Wall Street's forecast of $868.11 million. The company said its GAAP gross margin is expected to be in the range of 40 percent to 42 percent, while GAAP operating expenses are expected to be about $305 million. Nvidia has benefited from the consumer market, as its core business of selling graphics cards and chipsets augment its fledgling server and mobile businesses. Shares of Nvidia rose to $13.01 in extended trading from their $12.27 close. (Reporting by Ian Sherr; Editing by Tim Dobbyn and Carol Bishopric) (([e-mail]; +1 415.677.2542; Reuters Messaging: [e-mail])) Keywords: NVIDIA/ (See http://blogs.reuters.com/mediafile/ for Media and Technology -- Reuters' media and technology blog) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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