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Nvidia's rotten Q2

Gets forecasts wrong

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Nvidia had a rotten quarter in Q2, with sales plummeting up to $172.9m from Q1.

Sales for Q2 ending 28 June will come in somewhere between $410 and $430m, Nvidia says. At best this is a 26 per cent slump on Q1, and wildly at odds with the company's own estimates announced in May of a 1-3 per cent advance in revenue, topping out at $600m.

This to us suggests some loss in market share - by Nvidia's own reckoning PC sales were down 13 per cent on Q1, and the graphics chip designer blamed lower sales by key customers such as Apple. Of course, retail collapse, tougher competition from ATI, falling market share for AMD (with the consequent knock-on for Nvidia chipsets) could also be thrown into the pot.

And let's not forget Xbox. Nvidia also miscalculated demand here and will book a hefty writedown on inventory. This means that Q2 will be at best just above breakeven.

Nvidia's terrible quarter explains the Publish=2002/07/30&pages=04&seq=26">Digitimes story on Monday, which reported demands from Nvidia for Taiwanese mobo makers to stock up with $50m before the end of Q2.

This would have taken months for the mobo makers to work through, the Taiwanese newswire says. This does not suggest financial shenanigans, just sales reps keen to hit their targets. ®

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