Nvidia lowers Q2 revenue expectations

The company cites a bigger-than-expected shift to lower-priced GPUs and integrated graphics

Graphics company Nvidia on Wednesday lowered its revenue expectations for the second quarter of its fiscal 2011, partly because of a shift toward lower-priced graphics processing units and integrated graphics.

The company is projecting revenue between US$800 million and $820 million for the quarter ending on Aug. 1. Nvidia on May 13 said it expected second-quarter revenue to be in the range of $950 million to $970 million.

Higher memory costs associated with consumer graphics processing units drove demand for the cheaper GPUs, Nvidia said. "The increased solution cost of discrete GPUs led to a greater-than-expected shift to lower-priced GPUs and PCs with integrated graphics," Nvidia said in a statement. Discrete GPUs are separate graphics cards that can be installed on a computer's motherboard.

Economic weakness in Europe and China also contributed to the lowered revenue expectations.

The company will report its second-quarter earnings on Aug. 12.

Earlier this week the U.S. International Trade Commission (ITC) ruled against Nvidia for allegedly infringing on three Rambus patents. However, Nvidia and financial analysts said the ruling wouldn't impact business.

"We do not believe the ruling will have a material adverse impact on Nvidia's results," said Doug Freedman, a financial analyst with Gleacher and Company, in a research note sent on Wednesday. Freedman said the company's original revenue expectations were at risk not because of the court ruling, but because of the impact of product and market conditions.

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