AMERICAN-STATESMAN STAFFWednesday, October 24, 2007

Silicon Laboratories Inc. surprised Wall Street with stronger than expected third quarter revenue and profits, driving its stock up in early trading today.

In results reported before trading, the Austin-based chip company reported net income of $20.4 million, or 36 cents a share, on revenue of $87.9 million. Revenue was up 21 percent from a year ago, while net income was more than four times as high.

The comparisons take into account that the company sold its cell-phone related chip operations to NXP Semiconductors in March for $285 million.

The company also guided for more growth in the current quarter, with revenue expected to be between $93 million and $97 million.

Those results bolstered the company's stock, which climbed by $1.74, or 4.21 percent, to $43.07, at midday.

CEO Necip Sayiner said the company's growth was led by its line of FM radio receivers and short-range transmitter chips, which are incorporated into cell phones and other consumer products.

"We are surprising some analysts with the growth we are seeing in the business," the CEO said. "Strong demand combined with lower operating expenses drove beetter-than-expected results. With this foundation in place, we are prepared to further invest in our R&D."

Sayiner added that the company continues with its plans announced in July to spend $400 million buying back its stock. It spent about $30 million on its buy-back plan in the third quarter.

Analyst Arnab Chanda with Deutsche Bank Securities Inc. said the Austin company's results reflect the strength of its diverse product portfolio and the wisdom of its move to sell its cell-phone-related chip business.

"It is really the strength of their product cycles," Chanda said. "Their strategy is playing out very well."