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Texas Instruments Gives Upbeat Revenue Forecast

Monday, 22 July 2013 05:39 PM

Texas Instruments Inc. gave a third-quarter revenue forecast Monday that was stronger than some analysts had expected and said customers seem more confident about placing orders for chips.

Orders picked up in the first half of 2013 and Chief Financial Officer Kevin March told Reuters that business continues to improve, following weak demand last year due to concerns about the global economy.

Texas Instruments' book to bill ratio, a measure of orders filled, was 1.03 in the second quarter, unchanged from the prior quarter. A ratio of over 1 suggests a chipmaker received more orders than it could fill during a given period.

But TI's customers are starting to give the No. 3 U.S. chipmaker a better idea about their future needs.

"Up until this past quarter with these orders it's been for pretty short-term deliveries, so that's a bit of a change in tone and perhaps confidence on the part of our customers," March said.

Texas Instruments is winding down its wireless chip business as competition from Qualcomm and other rivals has hurt profitability. TI is focusing on its analog and embedded chips used in products ranging from cars to televisions and which account for the bulk of the company's revenue.

Analog and embedded account for 78 percent of TI's revenue, up 6 percentage points from a year ago, the company said.

TI posted second-quarter revenue of $3.047 billion, down 9 percent from the year-ago period.

Net income jumped to $660 million, or 58 cents a share, from $446 million, or 38 cents a share, in the 2012 second quarter.

In the third quarter, revenue will range from $3.09 billion to $3.35 billion, the company estimated.

Analysts on average had expected revenue of $3.059 billion for the second quarter and $3.199 billion for the third quarter, which ends in September, according to Thomson Reuters I/B/E/S.

Texas Instruments estimated earnings per share of 49 to 57 cents in the third quarter.

Shares of Texas Instruments rose 1.95 percent in extended trade after closing up 0.43 percent at $37.42 on Nasdaq.

© 2019 Thomson/Reuters. All rights reserved.

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Texas Instruments Inc.'ssecond-quarter revenue came close to Wall Street's expectations on improved chip demand from automakers and the communications industry, and it forecast stronger third-quarter revenue growth than some analysts had estimated.
Monday, 22 July 2013 05:39 PM
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