NVIDIA Warns of Sales Shortfall as Gaming Revenue Tumbles
08 August 2022 - 3:52PM
Dow Jones News
By Colin Kellaher
NVIDIA Corp. on Monday said its fiscal second-quarter sales
would fall well short of expectations amid a steep drop in gaming
revenue, and the graphics-chip maker said it would post more than
$1.3 billion in charges for inventory and related reserves based on
reduced expectations of future demand.
The Santa Clara, Calif., company said it expects to report
revenue of $6.7 billion for the quarter ended July 31, some 17%
below the $8.1 billion it had forecast in May, amid a 33% drop in
gaming revenue to $2.04 billion.
Analysts polled by FactSet, on average, were expecting total
revenue of $8.12 billion and gaming revenue of $3.09 billion.
NVIDIA said it believes reduced channel partner sales due to
macroeconomic headwinds led to lower sell-in of gaming products
during the quarter. The company added that it implemented pricing
programs with channel partners to reflect challenging market
conditions that it expects to persist into the third quarter.
NVIDIA said the $1.32 billion in charges it will book reflect
long-term purchase commitments it made during a time of severe
component shortages and its current expectation of ongoing
macroeconomic uncertainty.
Shares of NVIDIA, which is slated to report its quarterly
results on Aug. 24, fell 6.4%, to $177.62, in premarket trading
Monday.
Write to Colin Kellaher at colin.kellaher@wsj.com
(END) Dow Jones Newswires
August 08, 2022 09:37 ET (13:37 GMT)
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