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Nvidia Posts Loss, But Shares Rise on Buyback Boost

Nvidia swung to a quarterly loss on a one-time charge, while a slump in the global desktop computer market caused the company to miss Wall Street expectations, the graphics chip maker said on Tuesday.

Nvidia shares nevertheless rose 10 percent in extended trading after the company said it is increasing its share buyback program by $1 billion to $2.7 billion.

The net loss for the second quarter was $120.9 million, or 22 cents a share, compared with a profit of $172.7 million, or 29 cents a share, a year ago.

Excluding items, the company reported earnings of 13 cents a share, short of the average analyst expectation of 17 cents a share, according to Reuters Estimates.

The latest quarter's results included a $196 million charge to cover warranty, repair, return and other costs related to weak die and packaging material in versions of its products used in notebook computers.

"The desktop PC market around the world weakened during the quarter," said Nvidia Chief Executive Jen-Hsun Huang in a statement. "And our miscalculation of competitive price position further pressured our desktop GPU business."

Revenue fell to $892.7 million, a 5 percent decline from $935.3 million a year ago.

Analysts were expecting revenue of $907.6 million, according to Reuters Estimates.

Nvidia shares rose a $1.13 in extended trading from their $11.07 close Tuesday on Nasdaq.