Nvidia shares sink on poor earnings

Shares of graphics chip maker Nvidia tumbled 35 percent Friday after the company's second-quarter earnings disappointed Wall Street.

The setback comes as the Santa Clara company faces increased competition from arch rival ATI Technologies.

Nvidia said Thursday that its second-quarter net income fell 79 percent to $5.1 million, or 3 cents a share, from $24.2 million, or 14 cents a share, a year ago. Revenues fell slightly to $456.1 million, from $459.8 million a year ago.

Chief Executive Jen-Hsun Huang called the quarter "challenging and disappointing" on a conference call Thursday afternoon with analysts.

On Friday, shares of Nvidia, a developer of graphics chips popular among video gamers, plunged to $9.43, a new 52-week low. The company's stock was downgraded by a few analysts on Wall Street, and its earnings estimates were slashed. Some analysts criticized Nvidia management for not issuing an earnings shortfall warning.

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News source: SiliconValley

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