) to peer perform from outperform.
Analyst Eric Gomberg says the results were essentially in line with the company's guidance and his estimates. However, management guided 5%-6% revenue growth, and flat-to-down margins for the third quarter, which is less than his estimate of 5%-10% growth on flattish margins. The downgrade also comes from his concerns about growth in Nvidia's core (non-Xbox) business; inventory growth in excess of anticipated revenue growth; uncertainty about the timing and likelihood of recapturing lost market share; and gross margin improvement.
Gomberg cut the 56 cents fiscal 2004 (Jan) earnings per share estimate to 51 cents, and cut the 85 cents fiscal 2005 estimate to 66 cents (59 cents without a lower tax rate).