NVIDIA today lowered its previous guidance for its fiscal second quarter by about 15 percent.
In a statement, the company said revenue for the quarter will be between $800 million to $820 million, instead of the range of $950 million to $970 million, as it originally forecast. Wall Street was expecting a profit of 19 cents a share on revenue of $951 million.
The news isn't totally unexpected. Deutsche Bank analyst Ross Symore cut his estimates on Nvidia, citing weak demand. Seymore said Nvidia, a major player in discrete graphics chips for desktops, was hit by a sales swoon in that category.
Nvidia also has graphics chips for notebooks, but those usually have lower profit margins. He added in a research note:
According to data from Mercury Research, 2Q10 was a poor quarter for GPU shipments which was compounded by significant (-650 bps q/q) share loss for Nvidia.
In its own statement, Nvidia explained the shortfall on "increased memory costs and economic weakness is Europe and China," primarily in the consumer GRU business.
Shares of NVIDIA of were down more than 3 percent in regular trading, closing at $10.13. Shares continued to slip in after-hours trading, down more than four percent.
The company said it would not host a conference call to discuss the adjusted forecast but will instead address it during its quarterly earnings call on August 12.