Nvidia Reduces Revenue Q4 Forecast, Cites Hard Drive Shortage3:51 PM EST Wed. Jan. 25, 2012
Nvidia reduced its fourth quarter earnings projection Tuesday and announced a revised revenue forecast of $950 million, down from its original expectation of approximately $1.07 billion provided on November 1.
The lower-than-expected earnings would stem from global disk-drive shortages caused from October’s Thailand floods, which have "had more impact on the mainstream GPU segment than anticipated," the chip maker said in a statement. Fewer PC shipments from OEMs, resulting from high disk-drive prices caused by the shortage, may have led to a lighter demand for its notebook and desktop GPUs, according to the company.
Nvidia also said that its Tegra 2 mobile chips saw a rapid drop in sales. Smartphones and tablets featuring its next-generation Tegra 3 mobile processors, said to deliver up to 3x the graphics performance and 61 percent lower power consumption than their predecessors, are set to launch in the first quarter of this year.
During its third quarter earnings call in November, Nvidia attributed much of its financial growth to its Tegra 3 release. “With Tegra 3 phone wins well ahead of Tegra 2's pace, we're expecting strong growth in the year ahead," said Nvidia president and chief executive, Jen-Hsun Huang.
At the end of the third quarter, the company quarterly revenue was $1.07 billion, up 4.9 percent from last quarter’s revenue of $1.02 billion.
Nvidia’s announcement comes on the heels of its rival chip maker AMD reporting a net loss of $177 million in its fourth quarter earnings. Much of the loss, AMD said, can be attributed to its investments in its partner foundry business GlobalFoundries but like Nvidia, lower-than-expected GPU sales were also listed as a pain point.
Nvidia declined to comment further on its reduced fourth quarter forecast; its official fourth quarter earnings call is scheduled for February 15.