By Neha Alawadhi
(Reuters) - Touchscreen chipmaker Synaptics Inc forecast current-quarter results far above analysts' estimates and confirmed that it had won contracts from Samsung Electronics Co Ltd for its Galaxy S4 smartphone and Note 8 tablet.
The company, whose shares rose 19 percent in after-hours trading on Thursday, said it expects fourth-quarter adjusted earnings of 88 cents to $1.00 per share on revenue of $190.0 million to $205.0 million.
The forecast far outstripped the average analyst earnings estimate of 62 cents per share, on revenue of $158.4 million, according to Thomson Reuters I/B/E/S.
"Synaptics ClearPath technology is being implemented in the next generation Samsung Galaxy S4 flagship smartphones as well as the new Samsung Note 8 tablet," Chief Executive Rick Bergman disclosed in a conference call with analysts.
Bergman said Synaptics' chips were being used for Galaxy S4's "air view" feature, which allows users to retrieve email and calendar previews by hovering their fingers over the apps.
Samsung has said it is seeing "unexpectedly strong demand" for the Galaxy S4 smartphone.
Stifel Nicolaus Co analyst Kevin Cassidy said Synaptics was also well-positioned to gain market share in the second cycle of Microsoft Corp's Windows 8 products.
Synaptics' touchscreen chips are also used in smartphones like HTC Corp's One, Sony Corp's water-resistant Xperia and BlackBerry's Z10.
LESS DEPENDENCE ON PCS
Synaptics has been reducing its dependence on personal computers and is moving towards smartphones and tablets.
Revenue from mobile customers rose 57 percent to $104.7 million in the third quarter, while revenue from PC products declined 9.9 percent to $58.6 million.
PC sales plunged 14 percent in the first three months of 2013, the biggest decline in two decades of keeping records, while tablets continued to gain in popularity, tech tracking firm IDC said earlier this month.
Synaptics' results are in sharp contrast to those of rival Cypress Semiconductor Corp, which last week forecast weak current-quarter margins as rising competition hurt prices of touchscreen microcontrollers.
Synaptics said it expects a fourth-quarter gross margin of 48 percent to 49 percent. The margin was 49.6 percent in the third quarter.
Stifel Nicolaus's Cassidy said that even though Synaptics' competitors tend to be faster to market, the company takes the time to develop more application-specific chips.
Synaptics' net income rose to $36.4 million, or $1.07 per share, in the third quarter, from $11.4 million, or 33 cents per share, a year earlier.
On an adjusted basis, the company earned 79 cents per share, beating analysts' average estimate of 57 cents per share.
Revenue rose 24 percent to $163.3 million, way above analysts' average estimate of $145.6 million.
Synaptics shares were trading at $45.50 in extended trading after closing at $38.54 on the Nasdaq.
(Reporting by Neha Alawadhi in Bangalore; Editing by Maju Samuel and Ted Kerr)