SAN FRANCISCO -- Nvidia posted higher fiscal fourth-quarter earnings, but its revenue outlook for the current quarter missed expectations as the graphics chipmaker faces more competition in a growing tablet market where it hopes to offset soft PC demand.

With PC sales losing ground to tablets, Nvidia is betting on its graphics expertise to make high-performance processors for mobile devices.

The Santa Clara company, whose core business is graphics chips for PCs, made inroads in tablets last year but competition from larger rival Qualcomm has Wall Street concerned the company may struggle to keep its mobile business growing fast.

"Looks like some of those products didn't have as strong an end of year as some might have expected and that they're now burning inventory," Cody Acree, an analyst at Williams Financial, said in reaction to Nvidia's revenue guidance.

Microsoft's long-awaited launch of Windows 8 in October brought touchscreen features to laptops but failed to spark a resurgence in sales that Nvidia and other PC chipmakers and manufacturers had hoped for.

Nvidia's traditional PC graphics chip business, which accounts for most of the company's revenue, grew 7 percent versus the year-ago quarter after the company gained market share.


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Nvidia's Tegra 3 mobile processor is used in Google's (GOOG) Nexus 7, one of only a handful of tablets to make inroads against Apple's (AAPL) iPads. The Tegra 3 chip is also used in Microsoft's Surface Windows RT tablet.

But some analysts worry Nvidia may struggle to maintain growth with new design wins for its upcoming Tegra 4 chip as competition increases.

Nvidia's Tegra group, the bulk of which comes from Tegra sales, grew 90 percent, year over year, to $208 million.

The company also said it expects to break ground this year on a new building at its Santa Clara headquarters to accommodate growth.

Fourth-quarter net income was $174 million, or 28 cents a share, up from $116 million, or 19 cents a share, in the same quarter last year. Analysts on average expected 24 cents, according to Thomson Reuters.

The chipmaker reported fourth-quarter revenue of $1.107 billion, up from $953 million in the year-ago quarter. It said revenue in the current quarter would be $940 million, plus or minus 2 percent. Analysts were expecting revenue of $1.102 billion for the quarter ended in January and $1.067 billion for the quarter ending in April.

Shares of Nvidia were unchanged in extended trade after closing down 0.5 percent at $12.37 on Nasdaq.