Tags: Texas-Instruments | forecast | profit | chip

Texas Instruments Forecasts Earnings That May Miss Estimates

Monday, 22 Oct 2012 05:12 PM

Texas Instruments Inc., the largest maker of analog chips, forecast fourth-quarter profit that fell short of analysts’ estimates, as chip resellers cut inventory on concern about weak economic growth.

Net income will be 23 cents to 31 cents a share on revenue of $2.83 billion to $3.07 billion, the Dallas-based company said today in a statement. Analysts on average had predicted earnings of 37 cents on sales of $3.22 billion in the current period, according to data compiled by Bloomberg.

Texas Instruments has thousands of customers ranging from home-appliance providers to manufacturers of space hardware, making its earnings an indicator of economic demand. Concern that global growth will remain sluggish has led distributors of Texas Instruments’ products to reduce orders to bring down inventory levels, according to Tore Svanberg, an analyst at Stifel Nicolaus & Co.

“The main culprit is the industrial market that’s primarily served by distributors,” Svanberg said. “Consumer is also particularly weak.”

Texas Instruments shares were little changed in extended trading following the announcement. They had declined less than 1 percent to $27.79 at the close in New York, leaving the stock down 4.5 percent this year.

Third-quarter net income was $784 million, or 67 cents a share, compared with $601 million, or 51 cents, in the same period a year earlier, Texas Instruments said. Sales fell 2.2 percent to $3.39 billion. Analysts had predicted revenue of $3.3 billion.

Texas Instruments is the latest chipmaker to report earnings that aren’t getting the usual boost from increasing demand during the end-of-year holiday shopping season. Last week, Intel Corp. and Advanced Micro Devices Inc. said demand for personal computers has fallen below typical seasonal patterns.

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Texas Instruments Inc., the largest maker of analog chips, forecast fourth-quarter profit that fell short of analysts' estimates, as chip resellers cut inventory on concern about weak economic growth.
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2012-12-22
Monday, 22 Oct 2012 05:12 PM
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