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Nvidia said that its net income fell 48 percent for the first fiscal quarter ended April 29. But the graphics-chip maker beat expectations and its stock is rising.

Revenues for the quarter were $924.9 million, down 4 percent from a year ago. Net income was $60.4 million, or 10 cents a share, compared with $135.2 million, or 22 cents a share a year ago. That’s a 55 percent drop.

But on an adjusted basis, Nvidia reported 16 cents a share. Analysts were expecting revenue of $915.7 million and 10 cents a share.

Many feared that a slowdown in PC sales and the continued hard drive shortage (due to last fall’s flooding in Thailand) would hurt Nvidia in the quarter. Nvidia is balancing its investment in its core business of making graphics chips for PCs with its expansion into the Tegra product line, or chips for mobile devices.

“Kepler graphics processing units (GPUs) are accelerating our business,” said Jen-Hsun Huang, president and chief executive officer of Nvidia, in a statement. “Our newly launched desktop products are winning some of the best reviews we’ve ever had. Notebook GPUs had a record quarter. And Tegra is on a growth track again, driven by great mobile device wins and the upcoming Windows on ARM launch.”

He added, “Graphics is more important than ever. Look for exciting news next week at the GPU Technology Conference as we reveal new ways that the GPU will enhance mobile and cloud computing.”

In the second fiscal quarter ending at the close of July, Nvidia forecasts revenues of $990 million to $1.05 billion. The company will make a 10-year, one-time donation to Stanford Hospital of $25 million.

“Nvidia had a solid quarter but its success was a bit hampered with TSMC’s lack of ability to ship the new Kepler architecture-based discrete graphics solutions,” said Patrick Moorhead, an analyst at Moor Insights & Strategy. “The good news for Nvidia is that they see a path to improved volumes and they have the architecture to beat, which will now be rolling into even higher margin and revenue Quadro and Tesla commercial designs.  I also believe Nvidia are being conservative on Windows RT volumes, but that is wise, given Microsoft’s lack of transparency on their plans.”

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