Although it may have been a bit late to the party with Kepler, Nvidia still managed to stay in the black despite a drop in revenue and net income.

Nvidia’s revenue slipped 3.9 percent to $924 million between February and May, but the drop was in line with Nvidia’s predictions. Profits also shrank to $60.4 million, a far cry from $135 million reported in the same quarter last year and almost 50 percent lower than in Nvidia’s fiscal Q4 2012.

Nvidia CEO Jen-Hsun Huang said that Kepler would accelerate sales and pointed out that shipments of notebook GPUs hit an all-time high. The Tegra business is also showing signs of recovery after a pretty disappointing few months in late 2011.

Huang also stressed that Nvidia is unable to meet demand for 28nm chips due to manufacturing issues, which came as no surprise given previous statements out of Qualcomm, which is also struggling to keep up with demand for its 28nm Snapdragon processors. Nvidia expects 28nm chips to make up about 30 percent of its shipments in the current quarter.

On the whole Nvidia can afford to sound optimistic. Kepler is proving to be a success, hampered to some extend by slow introduction and supply issues, and Tegra is bouncing back nicely. Ironically, the very same 28nm supply issues that are hurting Kepler could benefit the Tegra business in the short term, as Qualcomm struggles to keep up with demand for its 28nm LTE enabled chips.