Earnings Warning Issued by Nvidia

Chip designer Nvidia Corp. warned that gross margins for the second quarter would be below expectations because of higher-than-expected technology costs.

Nvidia shares fell on the news to $19.36 in after-hours trade from a close of $20.41 on Nasdaq.

Nvidia said it expected to report revenue of $455 million to $460 million for the second quarter. The average estimate of analysts was for revenue of $460.7 million.

Nvidia said gross margins would be “slightly lower” than its original guidance because of product costs for the 0.13-micron semiconductor technology that it uses for some of its advanced graphics chips.

That process, a newer technology that increases the amount of features that can be etched on to a chip while in theory lowering costs, in the past has caused production delays and unexpected expenses for Nvidia.

The Santa Clara, Calif.-based company will report its full results for the quarter on Aug. 7.