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UPDATE 2-Nvidia results in line, sees higher sales

* Q3 EPS 15 cents vs 14 cent expectation

* Quarterly revenue in line with Street

* Chipmaker says sales to rise in current quarter

* Shares up about 3 pct after hours (Adds analyst and CFO comments, background)

SAN FRANCISCO, Nov 11 (Reuters) - Graphics chipmaker Nvidia NVDA.O posted quarterly results in line with expectations and said revenue in the current quarter would rise between 3 percent and 5 percent sequentially amid high expectations for its mobile chips.

Analysts on average had expected revenue to rise 2.6 percent sequentially in the fourth quarter.

The company, which competes with Advanced Micro Devices AMD.N, reported net earnings of $85 million, or 15 cents a share, for its fiscal third quarter ended Oct. 31, compared with a net profit of $108 million, or 19 cents a share, in the year-ago period.

That slightly exceeded analysts’ average expectation of 14 cents a share, according to Thomson Reuters I/B/E/S.

Nvidia, which specializes in high-performance graphics cards favored by gamers, faces pressure as Advanced Micro Devices and Intel Corp INTC.O launch microchips next year that combine traditional core processors with graphics processors.

To diversify, Nvidia is moving into the fast-growing mobile business, combining low-powered processors designed by ARM Holdings Plc ARM.L with its own graphics processors under the Tegra brand name for smartphones and tablets.

“It looks like based on the guidance here that they’re not expecting a large contribution from Tegra in the fourth quarter,” said Patrick Wang, an analyst at Wedbush Securities.

Manufacturers of smartphones using Google's GOOG.O Android operating system plan to use the Tegra chips, Nvidia Chief Financial Officer David White said, but those deals are still not affecting sales.

“It’s still not significant ... We’ll be able to talk a lot more about it in the next quarter or two,” he told Reuters.

The chipmaker said revenue in the third quarter was $844 million, down from $903 million in the year-ago period and in line with estimates of $844 million.

AMD and Intel’s new combined chips are unlikely to satisfy serious gamers who are willing to splash out hundreds of dollars for top-of-the-line graphics cards, but they may cut into demand for Nvidia’s lower-end chips.

Shares of Santa Clara-based Nvidia rose about 3 percent in after-hours trade after closing down 1 percent at $12.61. (Reporting by Noel Randewich; Editing by Steve Orlofsky, Phil Berlowitz)

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