Texas Instruments Inc said second-quarter earnings and revenue would be at the high end of its previous estimates, citing strong broad-based demand for its chips, particularly from industrial customers.
Texas Instruments, which makes chips for products ranging from phones to manufacturing equipment, said it is delivering products more quickly than it had in recent quarters but still is still not fully on schedule.
Ron Slaymaker, TI's head of investor relations, told analysts on a conference call that speedier delivery was not due to any slowing of demand but because the company has increased its production capacity.
In particular, the executive said he was not seeing slowing demand in Europe, despite economic turmoil and currency weakness there.
Europe is growing at about the same sequential pace as our overall revenue, he said, responding to analyst concerns about the region. We are being watchful, but we haven't seen any change yet in the demand.
Williams Financial analyst Cody Acree said TI's outlook for the quarter was prudently optimistic.
Acree said that even though TI made reassuring comments, investors are still concerned about how reliably it can predict demand as chip companies are often taken by surprise when consumer spending dries up.
But Acree, who has a buy rating on TI, noted that some of the worry is already built into TI's share price, which has fallen about 10 percent since late April.
The shares rose slightly to $23.92 in light late trade after TI issued its regular mid-quarter update. Shares closed at $23.88 in regular Nasdaq trade.
For the current quarter, TI forecast earnings per share of 60 cents to 64 cents compared with its previous target of 56 cents to 64 cents.
It said revenue for the quarter would be in the $3.45 billion to $3.59 billion range, compared with its previous guidance of $3.31 billion to $3.59 billion.
Analysts on average had expected earnings of 61 cents per share and revenue of $3.49 billion for the quarter, according to Thomson Reuters I/B/E/S.
Auriga USA analyst Daniel Berenbaum said investors had been hoping for a narrowing forecast range toward the high end of TI's target range.
I think probably everybody was expecting tightening to the high end and that's what we got, he said.
(Reporting by Sinead Carew; Editing by Richard Chang and Steve Orlofsky)