LSI Narrows Loss (Update)

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SAN FRANCISCO -- LSI(LSI Quote) narrowed its losses in the second quarter, as strong demand for the company's networking chips and storage systems pushed its sales and profit above Wall Street expectations.

"Our business has demonstrated resilience through recent market uncertainty, and we expect this to continue as the positive effects of seasonal buying patterns materialize in the second half," said CEO Abhi Talwalkar in a statement.

Shares of LSI jumped 10.9%, or 75 cents, to $7.60 in extended trading Wednesday.

Similar to Broadcom's(BRCM Quote) earnings report on Tuesday, LSI pointed to strong demand from telecommunications and networking infrastructure build-outs in Asia, which helped boost sales of its high-margin networking chips up 25% year-over-year to $140 million.

And sales of LSI's storage systems, which are used in gear sold by companies like IBM(IBM Quote), grew 24% year-over-year.

Overall, the Milpitas, Calif., company recorded revenue of $692 million in the three months ended June 29, up 3% year-over-year, and better than the $665 million expected by analysts.

LSI's better-than-expected financial report marks the fourth consecutive quarter in which LSI has outpaced Wall Street expectations, as the company rebounds from a difficult acquisition of Agere Systems, which it acquired for $4 billion in 2007.

In the months since the acquisition, LSI has sold various chunks of its business, including its consumer and wireless chip groups and slashed its workforce.

The company's stock remains roughly 25% lower than its level before the acquisition, although it is up considerably from its 52-week low of $3.75.