NVidia cuts Q2 outlook, cites inventory buildup

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.

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. For example, sales of NVidia's chips used in low-end desktop PCs with Advanced Micro Devices Inc. microprocessors were hit hard, they said.

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.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Matt Berger

PC World
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?