Nvidia cuts revenue forecast, shares drop

Tue Jan 24, 2012 6:49pm EST

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(Reuters) - Chipmaker Nvidia Corp unexpectedly cut its outlook for current-quarter sales, saying it has been hit by a shortage of hard drives in the personal computer supply chain and declining sales of a mobile chip.

Shares of Nvidia dropped 2.9 percent in extended trade after closing up 2.36 percent at $14.94.

Nvidia said it expects revenue in the quarter finishing at the end of January to fall to $950 million, plus or minus 1 percent.

Analysts on average had expected revenue of $1.057 billion for the quarter, according to Thomson Reuters I/B/E/S.

Nvidia had previously forecast quarterly revenue of $1.066 billion, plus or minus 2 percent.

PC manufacturers have been struggling to obtain enough hard drives to meet production targets after flooding last year ruined factories and sensitive machinery in Thailand, the world's No. 2 exporter of the components.

The shortage is disrupting production of PCs, which also use graphics chips made by Nvidia.

Nvidia also said sales of its Tegra 2 processors for smartphones and tablets was declining faster than anticipated after it was launched last year. The company is currently ramping up production of its newer Tegra 3 chip.

Nvidia had previously said it expected the hard drive shortage to have little effect on its revenue.

(Reporting By Noel Randewich in San Francisco; Editing by Tim Dobbyn)

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