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Profit Jumps at Silicon Labs

The chipmaker beats estimates.

SAN FRANCISCO -- Shares of

Silicon Laboratories

(SLAB) - Get Report

rose Wednesday after the company reported a sharp jump in its bottom line in the third quarter, beating Wall Street expectations.

The Austin, Texas, chipmaker said it earned $40.4 million, or 36 cents a share, vs. $4.7 million, or 5 cents a share at this time last year. Silicon Labs said EPS benefited from a 7-cents-a-share tax benefit.

Excluding stock compensation expenses, Silicon Labs said it earned 43 cents a share.

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Analysts polled by Thomson Financial were expecting EPS of 30 cents, excluding stock compensation expenses.

CEO Necip Sayiner said in a statement that strong demand combined with lower operating expenses drove the quarter's upside.

Silicon Labs saw double-digit sequential growth in its so-called broad-based businesses, which include microcontrollers and timing chips. And the company's voice and embedded modem business benefited from growth at a key customer during the quarter.

Revenue increased 21% year-over-year to $87.9 million, ahead of the $82.9 million expected by analysts.

Shares of Silicon Labs were up 6.8%, or $2.84, at $44.17 Wednesday, despite a down market

that pummeled many other chip stocks.

Looking ahead, Silicon Labs forecast fourth-quarter sales between $93 million and $97 million, vs. the $89.9 million expected by analysts."We are prepared to further invest in our R&D efforts to continue to accelerate our growth in order to optimize the business for the future," said CEO Sayiner.