* Revenue forecast beats expectations
* Shares up 8.7 percent in after-hours trading
* Sees design wins paying off (Adds detail on outlook, quote, byline)
By Noel Randewich
SAN FRANCISCO, July 27 (Reuters) - LSI Corp (LSI.N) forecast better-than-expected quarterly revenue as the storage and networking chipmaker gained market share, sending its stock price up more than 8 percent after the markets closed.
Strong corporate spending on technology, including cloud computing and social networking, will buoy LSI's sales in the third quarter despite economic uncertainty, Chief Executive Officer Abhi Talwalkar told analysts on a conference call.
"We have been talking for some time about our rich design-win pipeline, and we are now beginning to see its impact," Talwalkar said.
In May, LSI sold its Engenio external storage business to NetApp (NTAP.O) for $480 million, leaving LSI to focus on microchips for hard drives and networking equipment.
Its second-quarter results from continuing operations exclude revenue from that unit.
"The story was margin expansion, market-share gain and new design wins ramping up, but people were skeptical. It was a 'show me' story -- and they're showing it," said Merriman Capital analyst Kaushik Roy.
The company, which counts hard-drive disk maker Seagate (STX.O) as a key customer, forecast third-quarter adjusted profit from continuing operations of 11 cents a share to 17 cents a share on revenue of $535 million to $565 million.
Analysts were expecting revenue of $511 million, according to Thomson Reuters I/B/E/S.
Second-quarter revenue from continuing operations was $501 million, up from $473 million a year ago and above the average analyst estimate of $482 million.
Second-quarter net income from continuing operations was $28 million, or 5 cents per share, compared with net income of $3 million, or break-even per diluted share, a year earlier.
LSI shares rose 8.7 percent in after-hours trading after closing down 3.7 percent at $6.44 on the New York Stock Exchange. (Reporting by Noel Randewich. Editing by Richard Chang, Robert MacMillan, Gary Hill)