Sector Snap: Chip stocks up on strong quarterly reports

The chip sector, as measured by the Philadelphia Semiconductor Index, rose 15.59 points, or 4.2 percent, to 386.24.

Shares in Warren, N.J.-based Anadigics Inc. gained a quarter more value after the wireless chip maker said it swung to a first-quarter profit and forecast second-quarter results above Wall Street expectations.

Its shares jumped $2.02, or 24.4 percent, to $10.38 in midday trading.

ThinkEquity analyst Mike Burton said the company had a "very strong quarter" and said its outlook was "well above" expectations.

Higher sales were driven by the latest generation of cell phones and strong broadband revenue, Burton said in an investor note.

He raised his price target to $12 from 10. The new target represents a 15.6 percent premium on Wednesday's trading price.

Another communications chip company, Broadcom Corp., also soared on its earnings and outlook. The Irvine, Calif.-based company said first-quarter profit rose 22 percent on broadband chip sales, and it expects second-quarter sales of $1.08 billion to $1.13 billion, well ahead of analyst expectations of $1.03 billion.

Stifel Nicolaus & Co. analyst Cody Acree said Broadcom has bucked the trend of its large-cap peers by reporting better-than-expected results and controlling operating expenses.

Verizon royalty contributions rose to $35.6 million compared with Acree's expectations of just $32 million.