(Reuters) - Analog Devices ( ADI ) forecast fourth-quarter revenue and profit above Wall Street expectations on Wednesday, as it benefits from returning demand for its chips used in consumer electronics.

A decline in surplus chip inventory across sectors, including communication, consumer and industrial, has helped chipmakers see a recovery in orders after a years-long slump.

Analog Devices' ( ADI ) consumer segment revenue rose 3% to $316.6 million in the third quarter, compared with analysts' average estimate of $289.3 million, according to LSEG data.

Shares of Wilmington, Massachusetts-based Analog Devices ( ADI ) rose 1.3% in premarket trading after the company's third-quarter profit of $1.58 per share also beat LSEG estimates of $1.51.

The company now expects fourth-quarter revenue of $2.40 billion, plus or minus $100 million, above LSEG estimates of $2.37 billion. It also sees adjusted earnings per share of $1.63, plus or minus 10 cents, compared with estimates of $1.62.

The upbeat forecast follows strong results from rival chipmaker Texas Instruments ( TXN ).

However, economic and geopolitical uncertainty continues to limit the pace of recovery, Analog Devices CFO Richard Puccio said.

Revenue for the company's industrial segment, the largest in terms of revenue, came in at $1.06 billion, slightly lower than analysts' expectations of $1.07 million.

Analog Devices ( ADI ) provides semiconductors to businesses in a variety of industries, including aerospace, automotive, communications, digital healthcare, and industrial automation among others.

(Reporting by Priyanka.G in Bengaluru)