UPDATE 1-Xilinx expects demand to pick up
* Expects fourth-qtr sales at 2-6 pct above previous qtr levels
* Third-qtr earnings/share $0.38 vs estimate $0.37
* Third-qtr revenue $509.8 mln vs est $527.7 mln
By Sruthi Ramakrishnan
Jan 17 (Reuters) - Programmable chipmaker Xilinx Inc said it expects revenue from the current quarter to grow between 2 and 6 percent from third-quarter levels.
The company, which makes programmable chips used in cars and industrial machinery, however reported quarterly revenue below analysts' expectations.
"We expect communications to increase slightly. We expect industrial, aerospace and defense to be up sequentially with growth from all three secondary end markets," Chief Financial Officer Jon Olson said on a conference call.
The forecast could indicate a modest recovery among chipmakers catering to industrial businesses and spending by customers, Morningstar analyst Brian Colello told Reuters.
"This points towards a little more optimism towards Xilinx's end markets in general."
Rivals Altera Corp and Lattice Semiconductor Corp last month forecast revenue to fall from previous-quarter levels, citing lower demand from the communications market.
Xilinx's third-quarter net income fell to $103.6 million, or 38 cents per share, from $127 million, or 47 cents per share, a year earlier.
Revenue fell to $509.8 million from $511.1 million a year earlier. Revenue from industrial, aerospace and defense business - 36 percent of Xilinx's total revenue - grew 5 percent in the third quarter.
But sales in the company's base segment fell 24 percent while mainstream segment revenue was down 4 percent. The two segments make up Xilinx's older business lines.
Analysts on average expected earnings of 37 cents per share on revenue of $527.7 million, according to Thomson Reuters I/B/E/S.
A programmable chip can be reprogrammed to operate in any desired pattern, effectively rewiring a chip's circuitry on demand.
Shares of the company were up 2 percent in extended trading, after closing at $36.20 on the Nasdaq on Thursday.