Officials from graphics chip manufacturer Nvidia have revealed revised outlooks for the company’s second quarter financial results, due to cover the period ending July 27th, 2008.
Both revenues and gross margins are expected to be lower than previous guidance, with sales now estimated at between $875 and $950 million.
The decrease has been attributed to a general end-market weakness across the globe, the delay of the company’s next generation MCP technology and an overall decrease in graphic processor unit (GPU) prices.
The company has also been forced to take a one-time charge of between $150 to $200 million in order to cover the repair and replacement of damaged graphics cards, caused by faulty die/packaging material, used in older notebook systems.
The company, which also helped design and manufacture the GPU for the PlayStation 3, saw stock prices fall to a four year low following the announcement. Prices fell by 31 percent on the Nasdaq stock market, with share prices over the whole year down 63 percent.
However, as quoted by Bloomberg
, Oppenheimer & Co. analyst Rick Schafer has indicated that he still expects Nvidia to overcome rival ATi in the graphics chip market.
“We would use expected weakness today as an opportunity to build positions in a still solid long-term story,'' he said while raising his rating for Nvidia’s stock from “perform” to “outperform”.