DOW JONES NEWSWIRES
Texas Instruments Inc.'s (TXN) third-quarter profit slid 4.4% on
lower sales, but the company saw demand grow for the second quarter
in a row, including a 20% increase in analog chips.
Shares rose 2% to $24 in after-hours trading as the
communications-chip giant's results topped its guidance and it
predicted fourth-quarter earnings generally above Wall Street's
expectations. The stock has gained three-quarters from a six-year
low last December, but has fallen 7% from its 52-week high last
month.
Looking ahead, TI expects fourth-quarter earnings of 42 cents to
50 cents on revenue of $2.78 billion to $3.02 billion. Analysts
estimated earnings of 40 cents a share on revenue of $2.78 billion,
according to a poll by Thomson Reuters.
TI's outlook echoes recent predictions of stronger demand by the
world's largest chip maker, Intel Corp. (INTC) and eases concerns
that analog revenue may take longer to recover. Chief Executive
Rich Templeton said customers are winding down their inventory
corrections and have started to increase production.
With increased competition in the wireless arena, TI, which
makes chips used in everything from cellphones to industrial
machinery, has focused more on its strengths in analog and embedded
processing, and plans to exit the handset-baseband business by
2012.
In the latest quarter, the chip giant reported a profit of $538
million, or 42 cents a share, down from $563 million, or 43 cents a
share, a year earlier. The latest results included a $10 million
restructuring charge.
Revenue dropped 15% to $2.88 billion.
In September, TI raised its forecast to earnings of 37 cents to
41 cents a share on revenue of $2.73 billion to $2.87 billion.
Gross margin rose to 51.4% from 48.5%. Orders decreased 4%,
while inventory fell 29%.
Revenue declined in all segments, especially wireless, but
profits rose in the analog and embedded processing segments by 12%
and 2.7%, respectively. Wireless profits dropped 29%.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
kathy.shwiff@dowjones.com