Texas Instruments' third-quarter profit and sales Monday inched past the improved expectations the chip maker issued last month, and its largest division, which makes analog chips used in digital music players and other gadgets, saw 20 percent growth for the second quarter in a row.
The Dallas company also forecast results above Wall Street expectations, and its stock rose more than 2 percent in after-hours trading.
Texas Instruments' results come amid signs in the technology industry that a recovery may be on its way. Earlier Monday, Gartner Inc. said technology spending is expected to return to growth in 2010 after a dismal 2009. Even so, the market will not recover to 2008 revenue levels before 2012, according to Gartner.
The company said it earned $538 million, or 42 cents per share, during the quarter, down 4 percent from $563 million, or 43 cents a share, a year earlier.
Sales fell 15 percent to $2.88 billion amid the economic downturn, compared with $3.39 billion in 2008.
The results surpassed the company's September forecast and topped analysts' expectations. According to Thomson Reuters, analysts were expecting earnings of 39 cents per share on sales of $2.82 billion.
"We are encouraged with the strong sequential increase in demand for our products over the past two quarters as our customers are winding down their inventory corrections and have begun to increase production levels in their factories," said Rich Templeton, TI's chairman, president and CEO, in a statement.
For the current quarter, Texas Instruments forecast earnings between 42 cents and 50 cents per share - above the 40 cents per share that analysts are predicting.
The company forecast sales of $2.78 billion to $3.02 billion, compared with Wall Street's estimates of $2.78 billion.
Shares climbed 48 cents, or 2 percent, to $23.95 in after-hours trading. The stock had closed up 77 cents, or 3.4 percent, at $23.52.
Copyright 2009 The Associated Press. All rights reserved.
Basics Of The Stock Market
Stock Market 101 - everything you need to know but were afraid to ask!View Course »