September 15, 2009 / 9:10 PM / 10 years ago

UPDATE 2-Silicon Laboratories raises Q3 outlook

* Sees adj EPS $0.60-$0.62, up from prior est $0.48-$0.53

* Sees Q3 rev $123 mln-$126 mln, up from $114 mln-$119 mln (Adds analyst comment, details)

By Saqib Iqbal Ahmed

BANGALORE, Sept 15 (Reuters) - Chipmaker Silicon Laboratories Inc (SLAB.O) raised its outlook for the third quarter, citing better-than-expected demand for its chips used in FM radio tuners.

The strength in the radio business was a result of better-than-seasonal demand in handsets at the company’s largest customer, which is expected to moderate in the fourth quarter, Silicon Laboratories said.

“Audio broadcast, that is FM tuners, is seeing strength at their largest handset customer, Samsung, we believe,” Ian Ing, an analyst with Broadpoint Amtech, said.

The company said a faster-than-expected roll-out at a new consumer audio customer also helped the business.

The analyst said the new customer could be Apple Inc (AAPL.O), which recently launched iPods with FM radio tuners.

Silicon Laboratories, which expects further improvement in gross margin in the third quarter, counts Samsung (005930.KS), Huawei [HWT.UL], LG Electronics (066570.KS) and Motorola Inc MOT.N amongst its customers.

Silicon Laboratories now expects to earn 60 cents to 62 cents a share, excluding stock-compensation expenses, for the third quarter, up from its prior view of 48 cents to 53 cents.

For the quarter, it expects revenue of $123 million to $126 million, up from its prior view of $114 million to $119 million.

Analysts on average expect third-quarter earnings of 49 cents a share, excluding special items, on revenue of $116.5 million, according to Reuters Estimates.

Shares of the Austin, Texas-based company, which competes with Analog Devices Inc ADI.N and Broadcom Corp BRCM.O among others, closed at $47.96 Tuesday on Nasdaq. (Editing by Vinu Pilakkott and Deepak Kannan)

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