Profit Jumps at Nvidia

Updated from 5:08 p.m. EST

Nvidia(NVDA) fattened its top and bottom lines in the fourth quarter, thanks to healthy demand for chipsets, notebook processors and professional workstations.

But despite new product introductions, an acquisition and the long-awaited launch of Microsoft's(MSFT) Vista operating system, Nvidia suggested it will not be able to outrun the seasonal slowdown in the PC and graphics chip industry in its current quarter.

"Although we're enthusiastic about Vista's impact on our business, we'll be cautious in the first quarter," said CFO Marvin Burkett, adding that the company does not see any significant industry growth drivers to offset seasonality.

Shares of Nvidia were off 26 cents at $33.74 in extended trading Tuesday.

The cautious outlook upstaged a solid conclusion to Nvidia's fiscal 2007 year. In the three months ended Jan. 29, Nvidia said sales totaled $878.9 million, up 39% year over year and ahead of Wall Street expectations.

Nvidia earned $163.5 million in net income, or 41 cents a share, vs. $97.4 million, or 26 cents a share, at this time last year.

Excluding stock option compensation charges and $13.4 million in in-process research and development charges stemming from its acquisition of PortalPlayer, Nvidia said it earned $205.6 million, or 53 cents a share.

Analysts polled by Thomson Financial were expecting EPS of 43 cents, excluding stock compensation charges, although it was unclear whether other charges figured into expectations.