SAN FRANCISCO—Chip maker Nvidia Corp. Wednesday (July 28) said it expects revenue for the quarter ending Aug. 1 to be lower than previously projected.
Nvidia (Santa Clara, Calif.) said it now expects sales for the quarter to be between $800 million and $820 million, down from the previous target of $950 million to $970 million.
The revenue shortfall occurred primarily in the company's consumer graphics processor business, resulting from increased memory costs and economic weakness in Europe and China, Nvidia said. The increased solution cost of discrete GPUs led to a greater-than-expected shift to lower-priced graphics processors and PCs with integrated graphics, Nvidia said.
On Tuesday, some analysts cut their sales and profit estimates for Nvidia, citing sluggish traction for the company's Tegra products, lukewarm reviews for its new Fermi products and rising operating expenses.
The U.S. International Trade Commission (ITC) earlier this week issued orders that would bar the importation and sale of Nvidia products,pending presidential review. But both Nvidia and analysts said the ruling will have minimal impact on Nvidia, which plans to take a license for technology that the ITC said was protected by patents held by Rambus Inc.
Nvidia's earnings warning is problematic for the company at a time when many chip makers are reporting record revenues. Broadcom Corp., for example, reported Tuesday that its second quarter sales totaled $1.6 billion, a new all-time quarterly high for the company.
Consensus analyst expectations called for Nvidia to report sales of $955 million for its fiscal first quarter, which ends Aug. 1, according to Yahoo Finance.
Shares of Nvidia slipped 3 percent in trading Wednesday to close at $10.13. The stock plunged further in after hours trading following the revenue warning, trading below $9.50 late Wednesday.