Nvidia's third-quarter results beat estimates as the chipmaker refocused on smartphones and tablets, although its revenue forecast was a bit lower than expected.

NVIDIA today reported revenue of $1.07 billion for the third quarter of fiscal 2012 ended Oct. 30, 2011, up 4.9 percent from the prior quarter, and up 26.3 percent from $843.9 million in the same period a year earlier.

GAAP earnings were $178.3 million, or 29 cents per share, compared with $84.9 million, or 15 cents a share, in the same period a year earlier.

"NVIDIA's strategy is coming into its own, as the world becomes increasingly visual and mobile," said Jen-Hsun Huang, president and chief executive of NVIDIA. "Our GPU business accelerated in the third quarter, driven by strong demand from gamers and the professional market. And our mobile business benefited from new devices coming onto the market. With Tegra 3 phone wins well ahead of Tegra 2's pace, we're expecting strong growth in the year ahead."

Nvidia has jumped into mobile devices with its Tegra chips in the last couple of years and its first processors appearing in tablets made by Samsung and LG last year. The company now hopes that its latest Tegra 3 mobile processor (Project Kal-El) will offer the company a strong growth in the year ahead. However, Nvidia faces growing competition from chip heavyweights Qualcomm Inc and Texas Instruments Inc.

The company's sales in its Professional Solutions group, which includes graphics chips used in workstations, grew 9.5 percent sequentially in the third quarter.

Nvidia's main GPU business, which includes graphics chips used in PCs and revenue from a licensing deal with Intel, rose 1 percent from the second quarter.

Nvidia's Consumer Products group, which includes the Tegra chips, rose 14 percent sequentially to $191 million in the quarter.

Chief Executive Jen-Hsun Huang in September said Tegra revenues would reach $1 billion next year.

Fears of a slowdown in PC manufacturing late this year and in 2012 due to the flooding in Thailand could also have an impact on Nvidia's business, as global PC shipments are expected to fall, weakening the demand for Nvidia's computer graphics chips.