Nvidia Sales Hit New High; Reveals Options Probe

Graphics chip maker Nvidia posted record-high revenue for the second quarter on strong sales across several product groups including desktop, laptop and handheld graphics processing units, the company said Thursday.

The company said its revenue hit an all-time high, US$687.5 million during its fiscal second quarter, which ended July 30, up 20 percent over $574.8 million last year. Nvidia did not announce profit figures.

The company, which sells graphics chips to most major PC vendors and game console vendors, including the upcoming PlayStation 3 machine, held back further financial information because it is conducting a voluntary, internal review of its stock-option practices from the time of its stock market listing in 1999 to now.

Nvidia’s audit committee has already reached a preliminary conclusion that incorrect measurement dates were used in the accounting of stock-option grants in certain periods, Nvidia said. The company may have to record non-cash expenses based in future earnings reports to correct the situation.

Nvidia’s stock fell 8.1 percent to $22.21 in after-hours trading on the news.

Due to the inquiry, Nvidia will not announce additional financial results for the second quarter, such as net profit and other figures. The company will announce full second-quarter results after the auditing committee finishes its review, Nvidia said.

A number of high-profile technology companies have recently found errors in their accounting of stock options, including Apple Computer.

Last month, the company said an internal investigation found problems with stock-option grants made between 1997 and 2001, an issue that will likely cause it to restate some past financial results.

-Dan Nystedt, IDG News Service (Taipei Bureau)

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