Nvidia gave its forecast for the fiscal first quarter sales that was below the estimates made by analysts due to the low demand for personal computer parts and stiff competition in new markets. Sales in the period ending in April will be around $940 million, according to the statement released by the graphics processor company. It projects revenue of $921.2 million to $958.8 million. Analysts predict an average of $1.07 billion according to a poll made by Bloomberg.
PC makers have been scaling back orders for components, including Nvidia chips that speed up graphics for gamers and designers. The company tried to gain ground intot he faster growing mobile market with its Tegra processor but it faced tough competition from companies, such as Qualcomm.
Nvidia shares dropped to $12.20 in extended trading after the earnings report. They had fallen less than 1 percent to $12.37 to close in New York. They have declined 23 percent in the past year. In the fourth quarter than ended January 27, Nvidia’s net income increased to $174 million or 28 cents per share, compared to $116 million or 19 cents a share the previous year. Sales increased 16 percent to $1.1 billion. Analysts estimated earnings of 24 cents on sales of $1.1 billion according to the Bloomberg poll.
Chief Executive Officer Jen-Hsun Huang managed to make Nvidia branch out into processors that run mobile phones and tablets. This lessened its dependence on PCs, which is a market that is on a downward trend for the second straight decline in 2013.
Nvidia is facing a threat from AMD and Intel Corp. that are building the function performed by graphics chips into their microprocessors. This could shrink the market available to Nvidia’s stand-alone parts. PC shipments went down in the first quarter, which dragged down demand for chips used in add-in graphics cards.
