Nvidia shares slipped 5 percent in after-hours trading on Wednesday, after the graphics company reported a drop in quarterly profits, in spite of strong revenues.

Net profit dropped to $116 million, or 19 cents a share, down from $171.7 million and 29 cents a share in 2010.

Revenue was $953.2 million, up from $886.4 a year ago and it was in line with analysts’ expectations. However, Nvidia announced that it expectations for the current quarter are somewhat more conservative, $900 to $930 million, while analysts had hoped for $944 million.

Nvidia believes Tegra 3 and Kepler will help turn things around in the latter part of the year, but the outfit faces strong competition both in the ARM and graphics markets.