Nvidia Takes Restatement Charge

Nvidia(NVDA Quote - Cramer on NVDA - Stock Picks) restated its financial results for fiscal 2006 and the first quarter of fiscal 2007 Wednesday, incurring $127 million in non-cash charges as a result of discrepancies in its stock-option accounting.

The graphics chip maker said an internal audit committee has completed its investigation into past stock option grant practices and reported its findings to the company's board.

Nvidia said earlier this year that the committee had found "instances of the use of incorrect measurement dates for certain option grants," a practice known under the catch-all phrase of "backdating." More than 100 companies are currently under scrutiny for backdating stock options.

Santa Clara, Calif.-based Nvidia said Wednesday that it is cooperating with an ongoing inquiry by the Securities and Exchange Commission into the matter.

Nvidia said that the incorrect stock option measurement dates resulted in an aggregate non-cash charge of $127 million for stock-based compensation and associated payroll tax expense, net of related income tax effect. Earlier this month, Nvidia said it expected to incur charges of less than $150 million because of the backdating.

The restatement did not have a material impact on Nvidia's operating results for any period in the current 2007 fiscal year.

Nvidia also filed its complete financial report for the second quarter of fiscal 2007, which it had delayed because of its internal stock option review. The company said it earned $86.8 million, or 22 cents a share, in the three months ended July 30, on revenue of $687.5 million.

Shares of Nvidia were up 1.7%, or 62 cents, at $36.59 in midday trading.