TI Beats Street Despite Lower Profit

Updated from 1:11 a.m. EDT

DALLAS (TheStreet) -- Texas Instruments(TXN Quote) beat analysts' estimates in its third-quarter results, boosted by sales of its analog products.

Texas Instruments shares were at $24 in premarket trading Tuesday. The stock climbed 67 cents, or 2.85%, to $24.19 in extended trading Monday after the earnings were released. It closed Monday at $23.52.

The chipmaker posted sales of $2.88 billion after market close, down 15% on the same period last year, but above Wall Street's forecast of $2.82 billion.

Texas Instruments earned 42 cents a share on net income of $538 million, down slightly from $563 million and 43 cents a share in the year-ago quarter. Analysts surveyed by Thomson Financial had predicted earnings of 39 cents a share.

The company also increased its sales sequentially, up from $2.45 billion in the second quarter of fiscal 2009.

"We are encouraged with the strong sequential increase in demand for our products over the past two quarters as our customers are winding down their inventory corrections and have begun to increase production in their factories," said Rich Templeton, the Texas Instruments CEO, in a statement. "Our performance in the quarter exceeded our expectations and was led by a second consecutive quarter of 20% growth in analog."

Like Intel(INTC Quote), which reported good third-quarter numbers last week, Texas Instruments is seen as a key barometer (subscription required) for the tech sector, providing core components for cellphones and other electronic devices.

The firm also grew its third-quarter operating profit 2% compared to the same period in 2008.

"Revenue growth, combined with our early actions to pare costs do that we would not be dependent on an uncertain rebound in the overall economy, has resulted in solid improvements in our profitability," said Templeton.

Texas Instruments, which competes with Qualcomm(QCOM Quote) and STMicroelectronics(STM Quote) also issued bullish guidance late Monday.

The company expects fourth-quarter revenue between $2.78 billion and $3.02 billion and earnings between 42 cents a share and 50 cents a share. Analysts surveyed by Thomson Financial had forecast sales of $2.78 billion and earnings of 40 cents a share.

-- Reported by James Rogers in New York