Opening View: Brokerage Bunch Bombards Nvidia on Lowered Earnings Guidance

Nvidia (NVDA: sentiment, chart, options) late yesterday warned that it would take a charge of $150 million to $200 million for flaws in shipped products. The company also lowered its second-quarter revenue prediction to a range of $875 million to $950 million, compared to its previous outlook of $1 billion, and slashed its fiscal-2009 earnings guidance to 71 cents per share from $1.29 per share. As a result of the news, a J.P. Morgan analyst downgraded the firm to "neutral" from "overweight," with the broker citing "overwhelming evidence of broken execution." Meanwhile, Goldman Sachs analyst James Schneider cut his price target on the security to $16 from $30, a Citi Investment Research analyst lowered his price target to $19 from $25, and BMO Capital slashed its price target to $21 from $38.

American Airlines parent AMR Corp. (AMR: sentiment, chart, options) announced plans to write down $1.1 billion to $1.2 billion on the value of its aircraft fleet in the second quarter. The airline yesterday stated that it could cut 900 flight attendant jobs – or about 5% of its workforce – and reduce flights to battle record-high fuel costs.

Abbott Laboratories (ABT: sentiment, chart, options) made headlines this morning after announcing it will reach its market share goals for its drug-coated Xience V stent. The Food and Drug Administration approved the stent late yesterday, and the company now expects to conquer between 25% and 30% of the domestic drug-coated stent market over the next year. In fact, Goldman Sachs analyst Lawrence Keusch predicted the new stent will become the most-used of its kind in 2009.

Opening View: Brokerage Bunch Bombards Nvidia on Lowered Earnings Guidance