Shares of Newport Beach-based chipmaker Mindspeed Technologies Inc. jumped Wednesday after the company narrowed its sales outlook for the current quarter and gave a profit outlook that surpassed Wall Street’s expectations.
Investors sent the stock up nearly 8% in midday New York trading on a recent market value of $160 million.
Mindspeed said it now expects revenue of about $37 million for the three months through Jan. 1, near the high end of its previous outlook of $36.1 million to $37.5 million.
Analysts, on average, had been expecting sales of $37 million.
The company expects profits, excluding charges and benefits, of $2 million, ahead of analysts’ expected $1.2 million in profits.
Mindspeed makes chips for networking and spun off of from Newport Beach chipmaker Conexant Systems Inc. in 2003.
The better than expected forecast represents “the highest level of profitability the company has achieved as a public company,” it said.
“We are very pleased with the progress in our business model as evidenced by the strong operating performance, profitability and cash generation,” Chief Executive Raouf Halim said in a statement. “We are continuing to see strengthening, broad-based, global demand from numerous tier one customers, particularly in China.”
The maker of chips for routers, switches, networking gateways and other gear is expected to move its headquarters to Aliso Viejo later this year.
Mindspeed’s chips are used in wide-area networks used to link different corporate offices as well as networks that span parts of cities. The company also makes chips used in devices that allow telephone calls over Internet lines.
Mindspeed is set to report results on Jan. 25.
