Texas Instruments Earnings Double in Third Quarter

Texas Instruments Inc., whose chips power half the mobile phones sold last year, said Monday that third-quarter earnings more than doubled and profit this quarter would exceed forecasts. The company’s shares rose as much as 8.3%.

Net income increased to $447 million, or 25 cents a share, from $188 million, or 11 cents, a year earlier. Sales rose 13% to $2.53 billion from $2.25 billion, the Dallas-based company said.

Profit this quarter will beat analysts’ estimates, and revenue will rise as much as 26%, the company said. Chief Executive Tom Engibous has boosted sales of chips that run mobile phones with cameras and MP3 audio players. Texas Instruments gets about a quarter of its annual sales from semiconductors used in phones made by clients such as Nokia Corp.

“We were all expecting good news, but they just knocked the cover off the ball,” said Greg Barlage, a chip analyst at Stein Roe Investment Counsel, which owns Texas Instruments shares. “The boost was clearly wireless.”

Sales this quarter will total $2.49 billion to $2.7 billion, with profit at 14 cents to 19 cents a share, the company said. Analysts on average expected profit of 11 cents on sales of $2.49 billion, according to Thomson First Call. The net loss was 34 cents on sales of $2.15 billion a year earlier.

Shares of Texas Instruments rose as much as $2.13 to $27.80 in extended trading after the report. The stock closed at $25.67, up 71 cents, on the New York Stock Exchange. It has increased 71% this year.

A gain from selling shares of Micron Technology Inc. boosted third-quarter earnings. Excluding the gain, profit would have been 12 cents a share, Thomson First Call said. On that basis, analysts expected an average of 9 cents, according to Thomson.

Texas Instruments has cut costs by firing workers and hiring companies such as Taiwan Semiconductor Manufacturing Co. to make some of its most complicated chips. In factories it owns, Texas Instruments is building chips on larger, 300-millimeter wafers. The bigger wafers cut production costs by about a third, the company has said.

Texas Instruments said sales of chips used in wireless devices grew 30% in the third quarter from the year-earlier quarter.