Tags: TI | semiconductor | texas instruments | chip

Texas Instruments Sales Forecast Misses Estimates

Monday, 24 Oct 2011 05:56 PM

Texas Instruments Inc., the largest maker of analog semiconductors, forecast lower fourth-quarter sales than some analysts had estimated, indicating that demand for electronic components remains sluggish.

Revenue will be $3.26 billion to $3.54 billion in the period, the Dallas-based company said Monday in a statement. Doug Freedman, an analyst at RBC Capital Markets, had estimated $3.57 billion for the period. This is the first quarter that Texas Instruments is including its National Semiconductor Corp. acquisition in the forecasts. That transaction closed Sept. 23.

Texas Instruments gets most of its revenue from analog chips -- semiconductors that are key components in everything from missiles to washing machines. That makes its earnings an indicator of demand across the economy. Manufacturers of chips used in industrial machinery are suffering the worst declines in demand, said Vernon Essi, an analyst at Needham & Co. in Boston.

“It’s been a real weak link for a lot of these companies,” Essi said. While he maintains a buy rating on the stock because of its longer-term prospects, he said he’s “not seeing anything that’s too promising.”

Texas Instruments’ stock declined 30 cents to $31.39 in late trading. It had climbed 4 percent Monday at the close in New York, leaving the shares down 2.5 percent for the year.

Third Quarter

Profit in the fourth quarter, including costs related to the acquisition of National Semiconductor, will be 28 cents to 36 cents a share, the company said.

“Economic uncertainty continues to weigh on demand in almost every major market segment in which we operate,” Chief Executive Officer Rich Templeton said in the statement.

Third-quarter profit fell to $601 million, or 51 cents a share, from $859 million, or 71 cents, a year earlier. Revenue declined 7.3 percent to $3.47 billion.

On Sept. 8, Texas Instruments said profit in the third quarter would be 56 cents to 60 cents a share on sales of $3.23 billion to $3.37 billion, citing a slump across its product lines.

Three of Texas Instruments’ largest customers are Avnet Inc., Arrow Electronics Inc. and WPG Holdings Ltd. -- all distributors of electronic components -- which account for a combined 21 percent of the company’s sales, according to Bloomberg data.

Texas Instruments ranked second behind Santa Clara, California-based Intel Corp. among U.S. chipmakers in total sales last year. The company has pared back its mobile-phone radio chip business to focus on analog semiconductors, which can convert real-world input such as sound and touch into electronic signals. Analog chips also regulate power within devices.

© Copyright 2017 Bloomberg News. All rights reserved.

 
1Like our page
2Share
Companies
Texas Instruments Inc., the largest maker of analog semiconductors, forecast lower fourth-quarter sales than some analysts had estimated, indicating that demand for electronic components remains sluggish. Revenue will be $3.26 billion to $3.54 billion in the period, the...
TI,semiconductor,texas instruments,chip
418
2011-56-24
Monday, 24 Oct 2011 05:56 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved