3Dfx Interactive shares shaved off 9/16, or 9 percent, to 5 9/16 Tuesday after one of its leading competitors, NVIDIA, filed a patent infringement lawsuit against the chipmaker.
NVIDIA (Nasdaq: NVDA) claims that 3Dfx's (Nasdaq: TDFX) graphics chip and card products infringe on five NVIDIA patents.
NVIDIA is asking the court to issue an injunction barring San Jose-based 3Dfx from manufacturing, selling or importing the chips and card products in question, including VooDoo3, Voodoo4 and Voodoo5 and VSA-100 family of products. It also seeks as well as monetary damages.
3Dfx will report its second-quarter earnings after the bell.
Earlier this quarter, company officials warned its second quarter sales would fall below analysts' expectations, due to what it called a temporary component shortfall. It expects the shortage to clip at least 1 cent a share from its earnings this quarter.
"This shortfall is extremely frustrating, as the company has been on course for returning to operating profitability," CEO Alex Leupp in a prepared release back in June. "We believe this temporary component shortfall will result in deferred rather than lost revenues, and, therefore, we remain confident about our third quarter."
A survey of analysts by First Call Corp. predicted 3dfx would post a loss of 4 cents a share in the second quarter.
Last quarter, 3dfx posted a loss of $12.4 million, or 51 cents a share, on sales of $108.6 million.