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InvenSense rises as analyst forecasts sales gains

NEW YORK (AP) -- InvenSense Inc. shares rose Friday after a Piper Jaffray analyst said he thinks the technology company's revenue will pick up in the next few months, with Apple Inc. possibly providing an important boost.

THE SPARK: Analyst Auguste Richard said he thinks the company will report $75 million in revenue for its fiscal second quarter, which ends in September. That's about $8 million above the estimates of other analysts. Richard said that quarter should be an important milestone in the company's revenue growth, and while demand for products using in Samsung's Galaxy S4 phone appears to be lower than expected, he said he thinks the company is making more products for Apple.

InvenSense said it is unable to comment on future business with any company.

Richard said it will be good for InvenSense's prices and profit margins if it diversifies away from Samsung. He rates the shares "Overweight" with a price target of $27.

Richard expects InvenSense to report $290 million in revenue for the current fiscal year, which ends in March. He thinks the company could get $35 million to $40 million in revenue from Apple, but not all of that revenue is included in his estimate. Analysts expect $256.3 million on average.

THE BIG PICTURE: InvenSense makes micro-electro-mechanical systems gyroscopes used for motion tracking devices in consumer electronics. In its latest fiscal year the company said about 70 percent of its revenue came from products used in smartphones and tablets. Its major customers include Samsung Electronics, LG Electronics, and Sony Mobile.

The Sunnyvale, Calif., company said its revenue grew 36 percent to $208.6 million in its latest fiscal year. It reported those results on May 2.

In May a Pacific Crest Securities analyst said the company is "remains extremely well-positioned to penetrate Apple this year." Analyst John Vinh said he thinks InvenSense built up its inventory in the first quarter so that it could supply new iPhone models expected this year.

SHARE ACTION: Shares of InvenSense rose $1.01, or 7.4 percent, to $14.61 in afternoon trading. The stock has climbed 46 percent since May 2.