(Reuters) - Chipmaker Texas Instruments reported better-than-expected first-quarter profit and revenue on Tuesday, offering hope that a slowdown in demand for microchips late last year may not be as long-lasting as feared.
The company, which makes a broad variety of chips that go into many devices, also forecast strong second-quarter revenue and profit, sending its shares up over 5 percent after the bell.
Chipmakers have been struggling with declining demand for chips from China as its economy slows and manufacturers face the fallout of an ongoing trade dispute with the United States.
Texas Instruments had signaled last quarter that the semiconductor cycle is on a downward turn after over 10 quarters of constant growth and that trade tensions could "impact the depth and duration of this cycle."
In the reported quarter, while the company's revenue and profit were lower compared with a year earlier as it flagged a continuing slowdown across most of its markets, the extent of the drop was not as bad as was feared.
The Dallas-based company, often seen as a bellwether for a semiconductor industry, said it expects second-quarter revenue to be between $3.46 billion and $3.74 billion and earnings per share of between $1.12 per share and $1.32 per share.
Analysts were expecting revenue of $3.67 billion and profit of $1.24 per share. "The outlook is weaker than consensus but not as bad as feared," said Hans Mosemann, analyst from Rosenblatt Securities.
Revenue in the first quarter fell 5.1 percent to $3.59 billion, but beat analysts' average estimate of $3.48 billion, according to IBES data from Refinitiv.
Net income fell to $1.22 billion, or $1.26 per share, for the three months ended March 31 from $1.37 billion or $1.35 a share a year earlier.
Excluding items, the company earned $1.22 per share to beat Wall Street expectation of $1.13 per share.
(Reporting by Sayanti Chakraborty and Shariq Khan in Bengaluru; Editing by Arun Koyyur)