The Geforce FX screwup starts to show up in the financials

[i]"The Register is reporting that Nvidia is more than a bit unhappy about the GeForce FX’s market performance. Sales are down 30% from first quarter, due to the poor FX sales and falling revenue from the XBox deal. The NV35 is going to be very important for Nvidia’s investors:

Sales for the period were $405 million, down 30.5 per cent on Q1 2003, when Nvidia recorded sales of $582.9 million. Sales fell sequentially too, down 13.6 per cent on the previous quarter’s $469 million worth of sales.

The most recent quarter’s figure was below Wall Street’s expectation of $410 million, according to FirstCall’s poll. "[/i]

Time to get that NV35 out the door.

I agree that the FX is kind of a screwup, but

The most recent quarter’s figure was below Wall Street’s expectation of $410 million, according to FirstCall’s poll.

… they missed analyst expectations by a whopping one percent? Not exactly hair raising.

Actually, it probably is. There are a lot of ways you can strum the accounting guitar, and when you miss analyst expectations, it is generally seen as a bad sign.

1% is easily within the margin of error.

Besides, analyst expectations are nothing but bullshit. The analysts get fed the expectations by the company in question. There’s no analysis to it - the company says they’re on track for X $ in revenue, so the analysts say the company is on track for X $ in revenue.

“… they missed analyst expectations by a whopping one percent? Not exactly hair raising.”

Err thats not the point. So the analysts said Nvidia’s revenues were going to tank, and they tanked by 1% more. The point is a 30% drop in revenues in one quarter.

You’re missing the point. There are so many ways to massage the balance sheets that companies can generally meet analyst expectations – so when they don’t, it is widely considered a warning sign that even with book jiggering, they couldn’t do it.

Now, that may not be the case here – who knows, and I am certainly not following this case. But that’s why folks get concerned.