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Nvidia Slashes Forecast - Q2 Sales Down Nearly 25%

Nvidia cut its financial forecast for the current quarter, and disclosed that defects in certain graphics chips would result in at least $150 million in charges. The Santa Clara, Calif., chipmaker said it now expects sales in the quarter ending July 27 to range between $875 million and $950 million. That represents a 17% to 23% sequential drop in sales, compared to the 5% falloff to $1.09 billion in quarterly revenue expected by analysts polled by Thomson Financial.

Last month, Nvidia introduced its newest generation of graphics processors, touting the chips raw horsepower for delivering high-end graphics performance. Rival ATI took a different tack, with a more moderately priced and less-beefy family of graphics chips. According to news reports in recent weeks, Nvidia was forced to cut the price of its newest midrange chip out of the gate, in order to keep its product competitive with the ATI offerings.

The Street

Posted by | Thu, Jul 03, 2008 - 07:23 AM