Texas Instruments (TI) revised its guidance higher on Monday, citing an improved outlook for sales of wireless gear.
The company's statement could go some distance in easing fears that the housing slump in the United States might hurt consumer spending on electronics. TI is the world's largest maker of chips for mobile phones and often has a unique view of what's going on in the industry.
TI raised its profit forecast for the fourth quarter to the high end of its earlier guidance, predicting earnings per share in a range of $0.50 to $0.54 on revenue of $3.50 billion to $3.66 billion.
In October, TI caused some concern that consumer spending might be slowing when it said its fourth-quarter revenue would decline from the third quarter, due to falling demand from its customers and the loss of some business with Ericsson.
TI had offered earnings per share guidance of $0.48 to $0.54 on revenue of $3.40 billion to $3.68 billion. The company's revenue hit $3.66 billion in the third quarter.
"Wireless is probably doing a little better than we expected," said Ron Slaymaker, a vice president in TI's investor relations office, during a conference call. The company's wireless customers believe demand in December will fall less than earlier expected, he added.
TI's updated fourth-quarter guidance caused its stock to leap in after-hours trading on the New York Stock Exchange. The company's shares rose 4.8 percent, or $1.56, to end at $34.23 each.
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