FBR Capital Markets Previews NVDA 1Q11 Earnings, 2Q11 Guidance

NVIDIA Corporation (NASDAQ: NVDA) is set to report its calendar 1Q11 (April) financial results and provide calendar 2Q11 (July) guidance after the market close on Thursday, FBR Capital Markets reports.

“We generally expect in-line results and guidance, and do not expect this quarter's report to be a positive catalyst for shares,” FBR Capital Markets writes. “Rather, we think the risk is that Nvidia's results and guidance could be a negative catalyst for shares given recent weakening production start checks, still-sluggish consumer PC unit demand, concerns about Intel's Sandy Bridge product addressing a larger swath of PC makers' consumer notebook graphics processing requirements, concerns about weak non-Apple tablet sell through (Xoom and Galaxy Tab 2), impacts from Apple Macbooks moving away from Nvidia chipsets in 1Q11, and any dilutive financial impacts from its recently announced pending acquisition of baseband processor supplier Icera.

“So, over the short term, we would rather be exposed to MRVL (also reports in May, positive production start revision trends, and low investor expectations) and not NVDA, though we do think Nvidia is building interesting and highly profitable businesses in Quadro (workstation GPU) and Tegra (application processors), and with great potential in its Tesla (parallel compute) and now baseband efforts.

“We would find shares more attractive below $15, and think owners should trim shares over $22.”

NVIDIA Corporation closed Monday at $19.75.