Nvidia loss reflects lingering chip defect issue

From CNET News.com: Nvidia on Thursday posted a smaller loss than the year-earlier period but the graphics chip supplier is still grappling with costs related to a chip defect first addressed by the company last July.

Shares of the Santa Clara, Calif.-based company were up in after-hours trading.

Nvidia reported a second-quarter loss of $105.3 million, or 19 cents a share, better than the year-earlier period when it posted a loss of $120.9 million, or 22 cents a share.

Revenue was $776.5 million, down 13 percent, from $892.7 million reported in the second quarter of last year.

Excluding items (non-GAAP basis), Nvidia reported a profit of 7 cents a share, better than analyst estimates of a loss of 2 cents a share.

Jen-Hsun Huang, the president and chief executive officer, said the company's "business is recovering. Product demand is improving, and our strategic investments are leading to new growth." Nvidia expects revenue in the third quarter--ending October 25, 2009--to be up 5 to 7 percent over the second quarter.

Gross margin, a critical profit indicator, was 20.2 percent, above the 16.8 percent reported last year.

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