Graphics processor specialist NVIDIA (NASDAQ:NVDA) reported earnings following market close on Aug. 6 and they were good. The company delivered $1.153 billion in revenue, handily beating the midpoint of its own guidance (as well as Street consensus) of $1.01 billion.

As far as profits go, the company reported $0.05 in earnings per share (on a Generally Accepted Accounting Principles, or GAAP, basis) against a consensus of $0.10.

It's important to keep in mind, though, that the GAAP number was affected by a $0.19 per share charge from the wind-down of its Icera modem business as well as a $0.02 charge as a result of the recall of some of its Shield tablets.

On a non-GAAP basis (which excludes one-time charges as well as stock-based compensation) the company delivered earnings per share of $0.34, increasing 13% year over year.

The company is also guiding to revenue of $1.18 billion, solidly ahead of Street consensus of $1.10 billion, although slightly below the numbers it delivered in the year-ago quarter.

Let's take a closer look at the results to get a better sense of what's going on with the business.

The core GPU business is growing very nicely
NVIDIA reported 9% growth in revenue from its core graphics processing unit business. Within that, the company says that sales of its gaming-focused GeForce GPUs soared 51% year over year and cited "particularly strong" year-over-year growth in its higher-end GeForce GTX gaming-oriented graphics processors.

The rest of the company's GPU segments saw year over year declines. The declines in the company's Quadro GPUs aimed at professional workstations shrunk "due to weakness in the overall workstation market," according to the company.

Its Tesla GPUs, which are used in high-performance computing applications, also saw declines due to "variability in project purchasing." PC OEM-oriented GPUs also saw year-over-year declines, with the company blaming this on the "decline in overall consumer PCs."

Although it is discouraging that the nongaming portions of NVIDIA's GPU business saw declines, the impressive growth in gaming-oriented graphics processors further lends credence to the notion that the market for high-performance, gaming-oriented graphics processors can be healthy even in a tough overall PC environment.

Tegra still not doing that well
NVIDIA reported that sales in its Tegra processor business declined 19% year over year and 12% from the prior quarter. The company blamed the year-over-year decline on the drop-off in "Tegra OEM smartphones and tablets," which were "partially offset by growth in automotive infotainment systems, development services and SHIELD devices."

Although the automotive infotainment business has served as a good revenue stream for the company's overall Tegra business unit, it doesn't seem to be enough to offset the declines that the company is seeing from the relative dearth of Tegra smartphone/tablet OEM customers.

At some point, it makes sense to expect that NVIDIA's revenue from Tegra processors sold to OEMs will become minimal, which should make the year-over-year comparisons in this segment easier for the company. 

Finally, with respect to Tegra, NVIDIA announced that it will be winding down its Icera business (it couldn't find a buyer). This meant $89 million in restructuring charges during the company's fiscal second quarter and an additional $15 million to $25 million in charges during the second half of its fiscal year.

The good news, though, is that the company said in its earnings release that the wind-down of Icera will lead to a reduction in non-GAAP operating expenses in the second half of the year.

A solid quarter and good outlook from NVIDIA
All told, the better than expected fiscal-second-quarter results and strong fiscal-third-quarter guidance should come as welcome news to NVIDIA investors. That said, I'll be keeping an eye on the company's nongaming GPU businesses in the coming quarters to see if they can return to growth.

I'm not too worried about the company's Tesla business as purchasing in this market does tend to be "lumpy," and the weakness in the relatively low-margin OEM business is widely known and expected at this point.

The Quadro business, however, is worth watching as it has seen year-over-year declines for two quarters in a row. I suspect that the problems here are more secular (i.e., weak overall workstation market) than company specific (i.e., share loss), but would like to see a return to year-over-year growth here sooner rather than later as this is quite a high-margin business segment for the company.

Ashraf Eassa has no position in any stocks mentioned. The Motley Fool recommends Nvidia. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.