TI quarterly outlook reassures investors

NEW YORK (Reuters) - Texas Instruments Inc (TXN.N) said earnings and revenue for the current quarter were on track, sending shares up 6 percent on shareholder relief that it did not cut outlook after a spate of warnings in the mobile industry.

The maker of analog and wireless chips barely changed its targets, reassuring Wall Street after its biggest client, Nokia (NOK1V.HE), had warned last week of aggressive pricing in the handset market and weak consumer confidence.

"After Nokia's negative numbers we and the majority of the Street had expected TI would be a bit more cautious," said Stifel Nicolaus analyst Cody Acree. "To be able to be stable here and not change the estimates is a positive surprise."

In addition to Nokia's warning, Qualcomm Inc (QCOM.O), TI's bigger mobile chip rival, had talked earlier last week about consumers taking longer to buy new phones.

TI, whose stock had fallen 11 percent since early last week, forecast third-quarter earnings per share of 42 cents to 46 cents, compared with its July forecast of 41 cents to 47 cents, which had already been below Wall Street estimates.

It forecast revenue of $3.33 billion to $3.47 billion for the quarter, compared with its previous estimate of $3.26 billion to $3.54 billion.

The midpoints of the forecasts were unchanged and matched average Wall Street expectations for revenue of $3.4 billion on earnings before unusual items of 44 cents per share, according to Reuters Estimates.

The company, whose chips are used in everything from cell phones to industrial equipment, said analog and mobile were still in line with expectations it had going into the quarter, when it cited slowing orders for both product segments.

"There have been no notable variances to our initial expectations this quarter. All of our major product lines are tracking close to plan," Ron Slaymaker, TI's head of investor relations told analysts on a conference call.

TI ceded its lead of the wireless chip market to Qualcomm last year. It has also been losing business at Ericsson (ERICb.ST), a key client, to STMicroelectronics NV (STM.PA) .

Since Ericsson and STMicro recently revealed plans to set up a joint venture for wireless chips, Slaymaker said TI no longer expects to regain a share of business at Ericsson towards the end of next year as it previously hoped.

TI shares rose to $23.01 in extended trading, after closing at $21.71 on the New York Stock Exchange.

(Reporting by Sinead Carew, editing by Richard Chang)