Graphics chip maker Nvidia Corp. lowered its revenue expectations for the second quarter of its 2003 fiscal year, which ended Sunday, and said the weak market for its chips used in PCs will force it to write off a “significant” amount of unsold inventory.
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The Santa Clara, California, company now expects to report revenue of approximately US$410 million to $430 million, according to a statement released after the close of trading Tuesday. Nvidia had said in May that it planned to report a slight sequential uptick in revenue in the fiscal second quarter compared to the fiscal first quarter of 2003, when the company took in about $583 million. Analysts had expected revenue to be about $568 million, according to a survey of analysts by research company Thomson Financial/First Call.
Nvidia also said in a statement that it expected to report earnings per share “at or above” break-even, after accounting for a charge for inventory write-offs. Analysts had estimated that the company would earn $0.40 per share, according to Thomson Financial/First Call.
Slow PC sales during the quarter partly led to the warning, company executives said in a conference call with analysts and reporters Tuesday.
In addition, graphics chips designed for Microsoft Corp.’s XBox video game console went unused after Microsoft altered some security aspects of the XBox and in the process made earlier Nvidia chips obsolete. As a result, Nvidia was left with a chunk of unsold inventory, the company said.
Nvidia is scheduled to report its final fiscal second-quarter financial results Aug. 15.
Shares of Nvidia had fallen $3.78, or 23.3 percent, to $12.41 in after-hours trading.