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BEIJING, August 25 (TMTPOST) -- The U.S.  chip giant Nvidia achieved revenue of $6.704 billion, up 3% year-over-year, and net income of $1.292 billion, down 51% year-over-year, according to its fiscal year 2023 second-quarter results for the period ending July 31, 2022 released on Wednesday, local time in the U.S.

The overall downturn in the semiconductor market has put the chip giant's performance under pressure.

Nvidia's fiscal second-quarter results were worse than market expectations. Its earnings per share (EPS) was $0.51,down 51% from a year ago. Analysts previously estimated EPS to be $1.26 and the expected revenue was $8.1 billion. Nvidia had given an estimate of about $8.1 billion for the company's revenue for the fiscal quarter when it released its earnings report last fiscal quarter. Then, on August 8, Nvidia "warned" that the company's revenue for the second fiscal quarter, after preliminary calculations, was about $6.7 billion.

Nvidia's CFO Colette Kress confessed during the earnings call that the company experienced a challenging quarter, and there was a huge gap between the actual operating conditions and previous expectations, mainly due to the impact of weakening gaming business.

For the fiscal quarter, Nvidia's gross margin was 45.9%, down 21.2 percentage points month on month and 20.8 percentage points year-over-year. NVIDIA explained that the decline in gross margin primarily stemmed from $1.22 billion of inventory-related charges caused by adjustments to future demand expectations. This included $570 million in inventory on hand, and $650 million in purchases and default charges from adjustments and order cancellations.

The gaming business, which had long contributed nearly half of Nvidia's revenue, reported revenue of $2.042 billion in the second quarter, down 33 percent year-over-year and accounting for 30.46 percent of the company's total revenue, down from 43.68 percent in the previous quarter.

Kress said the company and its partners made adjustments to pricing in the channel due to a sharp slowdown in consumer demand led by global macroeconomic headwinds, and Nvidia's need to make preparation for new product launches.

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