NVIDIA Cuts Q4 Revenue Outlook; Stock Plunges

(RTTNews) - NVIDIA (NVDA) said that it cut its fourth-quarter revenue guidance, reflecting weaker than forecasted sales of its Gaming and Datacenter platforms.

In Monday pre-market trade, NVDA is trading at $137.74, down $22.41 or 13.99 percent.

"Q4 was an extraordinary, unusually turbulent, and disappointing quarter. Looking forward, we are confident in our strategies and growth drivers," said Jensen Huang, founder and CEO of NVIDIA.

In Gaming, NVIDIA's previous fourth-quarter guidance had embedded a sequential decline due to excess mid-range channel inventory following the crypto-currency boom. The reduction in that inventory and its impact on the business have proceeded largely inline with management's expectations. However, deteriorating macroeconomic conditions, particularly in China, impacted consumer demand for NVIDIA gaming GPUs. In addition, sales of certain high-end GPUs using NVIDIA's new Turing architecture were lower than expected, the company said.

In Datacenter, revenue also came in short of expectations. A number of deals in the company's forecast did not close in the last month of the quarter as customers shifted to a more cautious approach. Despite these near-term headwinds, NVIDIA has a large and expanding addressable market opportunity in AI and high performance computing, and the company believes its competitive position is intact.

The company now expects fourth-quarter revenue to be $2.20 billion, plus or minus 2%, compared to the prior outlook of $2.70 billion, plus or minus 2%. Analysts polled by Thomson Reuters expected the company to report revenues of $2.7 billion for the fourth-quarter. Analysts' estimates typically exclude special items.

The company noted that it will provide fourth-quarter of fiscal 2019 financial results and first-quarter of fiscal 2020 guidance on its earnings call scheduled for February 14.