( AP ) - Texas Instruments Inc., which makes the chips used in about half the world's cell phones, narrowed its fourth-quarter outlook Monday, saying it expects sales and profits toward the higher end of its previously announced range of expectations.
Ron Slaymaker , the company's vice president of investor relations, said sales of chips for cell phones and other wireless devices remained below usual seasonal trends.
Texas Instruments' biggest customer, Nokia Corp., and LM Ericsson AB have recently moved to buy chips from other suppliers.
But Slaymaker said the outlook for wireless had improved since October, and that overall inventories of semiconductors were lean, a good sign for chip makers.
The company said it expects to earn 50 to 54 cents per share from continuing operations in the fourth quarter, compared with the previous range of 48 to 54 cents per share.
Analysts were expecting 51 cents per share, according to a survey by Thomson Financial.
The Dallas-based company said sales would range between $3.50 billion and $3.66 billion, compared with the prior range of $3.40 billion to $3.68 billion. Analysts were predicting $3.56 billion.
The company's shares rose 19 cents to $32.67 in regular trading before the announcement. In about an hour of extended trading, they rose $1.58, or 4.8 percent, to $34.25.
Semiconductor sales, the bulk of TI's business, will be between $3.43 billion and $3.57 billion, the company said, compared with an earlier forecast of $3.33 billion to $3.59 billion.
Revenue from the education division, including calculators, will be $70 million to $90 million, in line with earlier guidance, the company said.
When the company forecast fourth-quarter sales of $3.40 to $3.68 billion in October, analysts were expecting $3.72 billion. Several analysts followed that warning by downgrading Texas Instruments stock, and the shares lost value.
Ericsson announced a year ago that it would add another supplier for chips in upper-end cell phones, leading TI to cut its fourth-quarter outlook. On the flip side, TI has renewed other wireless business with Ericsson that should begin to generate new revenue by the second half of 2008.
Slaymaker said sales of semiconductors for notebook computers and peripherals was strong - analog chips used in battery management, hard disk drives and printers, for example.
Texas Instruments also makes chips for digital cameras, televisions and other electronics.