Graphics chip maker NVidia reported markedly lower profits than expected for the period ending July 25, 2004 – the second quarter of NVidia's fiscal year 2005.

The company reported revenue of $456.1 million, compared to $459.8 million for the same quarter a year ago, but net income plummeted to $5.1 million from $24.2 million for NVidia's Q2 2004. The company anticipates sales in the current quarter to rise 3 to 10 per cent.

NVidia President and CEO Jen-Hsun Huang said that his company's second quarter was both challenging and disappointing thanks to a significant decline in the desktop GPU (general processor unit) market. He cited NVidia's recent release in volume of the GeForce 6800 as a major highlight of the quarter, however. The 6800 is required for Power Mac G5 owners who buy Apple's new 30-inch Cinema Display.

Other highlights of the quarter included NVidia's introduction of Scalable Link Interface, or SLI – a technology that will permit multiple NVidia cards and processors to work in parallel on systems that feature PCI Express, an emerging card interface standard; and MXM, or NVidia's Mobile PCI Express Module – the company's solution for laptop users looking for expandable graphics interfaces.

NVidia's Q2 report was well below analysts' expectations and its Q3 projections are below analysts' expectations as well. NVidia's stock took a tumble following the news.