Nvidia has reported markedly lower profits than expected for its second financial quarter, which ended on July 25.

The company reported revenue of $456.1 million (around £251 million), compared to $459.8 million (£253 million) for the same quarter a year ago, but net income plummeted to $5.1 million (£2.8 million) from $24.2 million (£13.3 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 market. He cited Nvidia's recent release in volume of the GeForce 6800 as a major highlight of the quarter, however.

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; 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. Accordingly, Nvidia's stock took a tumble following the news.