ON Semiconductor Corp.'s third-quarter profit fell from a year earlier, but its adjusted results beat Wall Street expectations and its shares rose in late trading on a bullish outlook.

The chipmaker's profit dropped 40 percent as it continued to wrestle with the economic downturn. Profit slid to $29.9 million, or 7 cents per share, for the quarter that ended Oct. 2, from $50.6 million, or 13 cents per share, a year ago.

Revenue fell nearly 19 percent to $472.9 million, from $581.5 million a year earlier.

The company said it would have earned $70.9 million, or 16 cents per share, if not for special items. On that basis, profit beat the expectation of analysts surveyed by Thomson Reuters, who on average were expecting a profit of 10 cents per share on revenue of $454.9 million.

President and CEO Keith Jackson called it a "strong financial performance."

Cash rose to $470.2 million, from $458.7 million at the end of 2008.

ON Semiconductor also predicted fourth-quarter revenue of $480 million and $495 million, ahead of analyst expectations of $467.3 million. Shares rose 26 cents, or 3.8 percent, to $7.09 in late trading.

The comapany said it expects average selling prices to fall 1 percent to 2 percent versus the third quarter. But Jackson said the backlog at the beginning of the fourth quarter was higher than at the beginning of the third, representing over 90 percent of expected fourth-quarter revenue.

He said revenue continues to improve from the lows of the first quarter.

"We also believe that the overall supply chain remains very lean," Jackson added. At the end of the third quarter it had nine weeks worth of distribution inventory, the lowest in the company's history, he said.