Texas Instruments reported a profit and sales that fell from last year's levels but topped analysts' expectations.
Texas Instruments said chip demand fell along with sales of cellphones and other electronics due to the weak economy, but it added that it expects sales to improve this quarter.
Chief Financial Officer Kevin March said the economy may not have hit bottom yet although it was close.
"End demand is still low in relation to where it was six to 12 months ago. We need to be prepared for slow to no growth for a while," March said.
The semiconductor giant said it earned 20 cents a share and brought in revenue of $2.46 billion in the second quarter. In the same period last year, Texas Instruments earned 44 cents a share on sales of $3.351 billion.
Excluding items such as restructuring costs, its profit would have been 25 cents per share versus analysts' average expectation for 23 cents a share, according to Reuters Estimates.
Analysts who follow Texas Instruments expected the company to report a profit of 19 cents a share on sales of $2.4115 billion.
Shares of Texas Instruments were downslightly in late trading. The stock finished the regular New York Stock Exchange session up 2.61 percent at $23.61. Click here for after-hours Texas Instruments quotes.
The company, which competes with Qualcomm forecast third-quarter earnings per share of 29 cents to 39 cents, including 1 cent in restructuring charges, on revenue of $2.5 billion to $2.8 billion.
That was better than analysts' average forecast for earnings, excluding restructuring charges, of 28 cents on revenue of $2.53 billion, according to Reuters Estimates