Shares of Texas Instruments Inc. (NASDAQ:TXN) jumped more than 4 percent Tuesday after the No. 2 chipmaker issued a forecast for slightly higher fourth-quarter revenue.

Shares of the Dallas-based semiconductor maker rose as high as $31.12, up $1.30 or 4.4 percent in afternoon trading, keeping up a surge that began in early trading. They closed at $31.01. For the year, Tuesday's jump brings TI gains to 6.5 percent.


TI late Monday said it expects revenue to range between $2.89 billion and $3.01 billion, above the prior forecast of $2.83 billion to $3.07 billion. Earnings, though, will range between 5 cents and 9 cents a share, due to a 21-cent charge related to plans to sell its wireless chip business. A year ago, net income was $298 million, or 53 cents a share.


Analysts had previously estimated earnings of 6 cents a share, according to Thomson Reuters surveys.


TI chips are designed into products across the industrial spectrum, including autos, appliances and heavy equipment, as well as electronics, which makes the chip pioneer a bellwether for the global economy. Its share increased after last year's $6 billion acquisition of National Semiconductor Corp.


VP Ron Slaymaker said overall demand is mixed, with strong demand from makers of tablets and electronic games. Still, he characterized demand from some sectors as "weak" but noted the company has low inventories.


At UBS, analyst Steve Eliscu maintained his "neutral" rating on TI shares, with a 12-month targer of $30.  He attributed the higher revenue predictions to better internal cost controls.


TI chips are embedded in the iPad from Apple (NASDAQ:AAPL) and the Kindle Fire from (NASDAQ:AMZN), among others. Analysts have suggested Amazon may seek to acquire the wireless chip unit but didn't ask about divestiture during a brief call with Skaymaker. The speculation rose after Amazon sold $3 billion in bonds last month, adding to its $5 billion in cash and investments.


TI previously announced plans to save as much as $450 million over the next year by exiting the wireless sector. The shift means as many as 1,700 manufacturing jobs will be eliminated with a cost around $325 million, mostly in the current quarter. 


CEO Rick Templeton said the company would leave the wireless sector, where rivals including Nvidia (NASDAQ:NVDA) and Qualcomm nc. (NASDAQ:QCOM) are making gains, especially with OMAP chips designed into portable devices. Instead, the company wants to focus in other sectors where it has a better advantage, the CEO said on Nov. 15. 


UBS's Eliscu said the exit from that sector will still maintain Texas Instruments' longstanding lead role as a top supplier of analog chips, which are especially useful in communications.


TI, like its bigger rival Intel Corp. (NASDAQ:INTC) also manufactures virtually its entire output, which adds to production costs. The company payroll now is about 35,000.