Texas Instruments Inc., Altera Corp. and other semiconductor stocks rallied Wednesday after Linear Technology Corp. said orders for analog chips are improving.
Linear gained the most in almost five years after saying late Tuesday that sales for the quarter ending in March would beat analysts’ estimates as orders in December were better than expected. Texas Instruments, the largest maker of analog chips, rose the most since 2008, while Altera and Freescale Semiconductor Holdings I Ltd. had their best days since October.
Earnings from makers of analog chips, which go into everything from household appliances to space hardware, are used by analysts and investors as an indicator of demand for electronics. Milpitas, California-based Linear is among the first of the U.S. semiconductor manufacturers scheduled to report quarterly results in the next two weeks.
“Although we are in a difficult business environment, we believe our business will improve in the upcoming March quarter,” Linear Chief Financial Officer Paul Coghlan told investors and analysts on a conference call Wednesday.
Linear said fiscal third-quarter revenue will rise 4 percent to 8 percent from second-quarter sales of $294.3 million. Based on calculations, sales would be $306.1 million to $317.8 million, higher than the $303.3 million that was the average of analysts’ revenue estimates in a Bloomberg survey.
Linear rose 11.6 percent to $33.32 at the close of trading in New York, its biggest gain since April 18, 2007. The shares had tumbled 17 percent in the 12 months ended yesterday.
Texas Instruments, which is scheduled to report results on Jan. 23, rose 8.6 percent to $33.72. Analog Devices Inc. climbed 5.7 percent and Freescale Semiconductor Holdings jumped 9.2 percent. Altera, which makes programmable chips used in mobile- phone base stations, rose 9.9 percent.
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