Israeli chipmaker TowerJazz expects strong growth into 2016 as it reported higher quarterly profit that beat estimates on rising orders from its largest customers.

TowerJazz said on Wednesday it earned 62 cents per diluted share in the third quarter excluding one-time items, compared with 39 cents a year earlier. Revenue rose to a record $244.2 million from $226 million. The maker of chips for smartphones, battery chargers, AC/DC adapters and image sensors was forecast to earn 57 cents on revenue of $243.8 million, according to Thomson Reuters I/B/E/S.

Including one-time items, on a GAAP accounting basis, TowerJazz posted basic earnings per share of 18 cents versus a 37 cent loss a year earlier.

“We’ve turned the corner on GAAP net profit where it’s sustainable. That’s a big deal,” Chief Executive Russell Ellwanger told Reuters.

Shares of TowerJazz were up 3.7 percent at 57.92 shekels ($14.84) in afternoon trade in Tel Aviv.

Leader Capital Markets raised its price target for TowerJazz to $17 from $14 following the results.

TowerJazz lost money for years following heavy investments in a second chip plant in Israel, while also paying high interest on its debt. It has since slashed its debt while adding, through acquisitions and joint ventures, plants in California and Japan.

Ellwanger said TowerJazz was particularly strong in markets such as power management for all types of electronic systems and in cameras – ranging from industrial cameras to surveillance.

The company’s growing size has enabled it to achieve efficiencies as it negotiates, for example, more favourable terms with suppliers.

TowerJazz forecast fourth-quarter revenue of $252 million, plus or minus 5 percent, representing year-over-year growth of 7 percent.

“This year we will have broken the $1 billion annualized revenue run rate, which is something we said we would do this year,” Ellwanger said. “2016 looks to be an excellent year for the company.”

Three strategic customers have reserved future capacity for 2016 and beyond, paying a total of $45 million in reservation fees, the company said.

(Editing by Susan Thomas)

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