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Reuters Technology
Nvidia in Arbitration with Microsoft on Chips
LOS ANGELES (Reuters) - Graphics chip maker Nvidia Corp. (NasdaqNM:NVDA - news) is in arbitration with Microsoft Corp. (NasdaqNM:MSFT - news) over the prices of chips Nvidia makes for Microsoft's Xbox game console, and a ruling in Nvidia's favor could have a "dramatic positive impact," its chief executive said Monday.
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Jen-Hsun Huang told Reuters that while the two companies have a strong relationship, they are disputing the price Microsoft pays for one of the custom processors Nvidia designed for the console.
"We're delighted we have a wonderful relationship with Microsoft and working on many fronts together, and the arbitration is just a step in an overall process in resolving this thing," Huang said.
"In the meantime we're recognizing the difference between what Microsoft is paying and the price they believe they should be paying as deferred revenues," he added.
Earlier on Monday Nvidia raised its forecast for the current quarter, its fiscal first quarter ending April 28, restated results for the past three fiscal years and announced an interim chief financial officer.
"When all this gets resolved, my guess is it'll be a pretty dramatic positive impact on our business," Huang said on a conference call to discuss the new guidance.
"All of our guidance we've given to you guys in the past is consistent with the conservative position we've taken with Xbox," Huang told analysts.
He said that revenue and operating income in the fourth quarter of fiscal 2002 were about $13 million lower than they would have been otherwise because of the deferrals pending the arbitration ruling.
Nvidia shares were up 14.5 percent at $34.75 in active morning trade on Nasdaq.
Less than two weeks ago, Microsoft lowered its own fiscal 2002 unit sales forecast for the Xbox by as much as 40 percent, blaming weak sales in Europe and Japan.
The company also cut prices on the console by as much as 38 percent in Europe and Australia.
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Reuters Technology
Nvidia in Arbitration with Microsoft on Chips
LOS ANGELES (Reuters) - Graphics chip maker Nvidia Corp. (NasdaqNM:NVDA - news) is in arbitration with Microsoft Corp. (NasdaqNM:MSFT - news) over the prices of chips Nvidia makes for Microsoft's Xbox game console, and a ruling in Nvidia's favor could have a "dramatic positive impact," its chief executive said Monday.
ADVERTISEMENT
Jen-Hsun Huang told Reuters that while the two companies have a strong relationship, they are disputing the price Microsoft pays for one of the custom processors Nvidia designed for the console.
"We're delighted we have a wonderful relationship with Microsoft and working on many fronts together, and the arbitration is just a step in an overall process in resolving this thing," Huang said.
"In the meantime we're recognizing the difference between what Microsoft is paying and the price they believe they should be paying as deferred revenues," he added.
Earlier on Monday Nvidia raised its forecast for the current quarter, its fiscal first quarter ending April 28, restated results for the past three fiscal years and announced an interim chief financial officer.
"When all this gets resolved, my guess is it'll be a pretty dramatic positive impact on our business," Huang said on a conference call to discuss the new guidance.
"All of our guidance we've given to you guys in the past is consistent with the conservative position we've taken with Xbox," Huang told analysts.
He said that revenue and operating income in the fourth quarter of fiscal 2002 were about $13 million lower than they would have been otherwise because of the deferrals pending the arbitration ruling.
Nvidia shares were up 14.5 percent at $34.75 in active morning trade on Nasdaq.
Less than two weeks ago, Microsoft lowered its own fiscal 2002 unit sales forecast for the Xbox by as much as 40 percent, blaming weak sales in Europe and Japan.
The company also cut prices on the console by as much as 38 percent in Europe and Australia.
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