NEW YORK - Programmable chipmaker Altera Corp raised its sales outlook for the third quarter, saying market conditions were improving, with the decline in the telecommunications sector turning out to be more moderate than expected.

Altera said on Tuesday it now expects third quarter sales to be in a range of flat to up 3 percent from the second quarter. It previously forecast that sales would decline 1 percent to 5 percent sequentially.

The company also said the third quarter results will include $4.5 million in severance costs and that it now expects quarterly operating expense to be in a range of $126 million to $128 million, higher than its previous outlook of $122 million to $126 million. (Reporting by Ritsuko Ando; editing by Andre Grenon)