Nvidia Cuts Earnings EstimateCategory: Manufacturers
Posted: July 3, 2008 10:12AM
In the videocard world Nvidia has reigned supreme, at least in the mind of many enthusiasts and gamers. But it seems the company has stumbled a bit of late and has cut its latest earnings estimates. Citing multiple causes, Nvidia announced yesterday that its second quarter earnings figures will be below its own estimates. Instead of expected revenue of $1.1 billion, analysts are now saying those numbers will be closer to $875 - $900 million. Contributing to the decline were delays in getting new product out the door, increased competition from AMD resulting in price cuts and the general economic downturn. Adding to the problems is an issue with some Nvidia chips used in notebooks which will result in a one-time charge of $150-$200 million to cover replacements and repair costs. Apparently there is an issue with the packaging material used in some of their chips that, combined with thermal issues common to notebooks, is causing the chips to fail at a higher than normal rate. Nvidia did not disclose which of its products were affected b this problem.