Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: Duncan Baird who started this subject	7/31/2002 9:04:55 AM
From: tejek	of 1574725

Inventory Woes Crush Nvidia By TSC Staff 07/30/2002 06:03 PM EDT Video card giant Nvidia (NVDA:Nasdaq - news - commentary - research - analysis) slashed its second-quarter revenue estimate by $150 million and said it would write off a large amount of obsolete product as inventory trends at Intel (INTC:Nasdaq - news - commentary - research - analysis) and Microsoft (MSFT:Nasdaq - news - commentary - research - analysis) hurt its product mix. The Santa Clara, Calif., chipmaker expects revenue of $410 million to $430 million and earnings that are near or above break-even, including the charge. Analysts polled by First Call were expecting revenues of $567.9 million and earnings of 40 cents a share, although those estimates didn't account for the charge. In a conference call, the company cited personal computer demand that plunged 12% sequentially in the quarter instead of the 5%-7% previously forecast. With demand estimates much too high, the company added, product built up at the end of the first quarter. In addition, a decision by Intel to clear its channels of Celeron processors and move out certain older versions of the Pentium 4 hurt Nvidia's product mix and gross margins. The company insisted, however, that the phenomenon doesn't imply a broad change in consumer preference toward cheaper machines. The inventory write-down reflects a change in the design of Microsoft's Xbox game console that made certain Nvidia chipsets obsolete, and much lower-than-expected demand for Advanced Micro Devices (AMD:NYSE - news - commentary - research - analysis) Athlon microprocessor. The company said it's cautious about the overall market in the third quarter. The shares were down about 16% to $12.59 on Instinet.

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