Ashok Kumar, an analyst at Raymond James, told CNBC’s “Squawk Box” that he expects Texas Instruments’ earnings to improve in the second half of the year.
Texas Instruments is scheduled to report first quarter earnings after the market close on Monday. The consensus Wall Street estimate is 31 cents a share on revenue of $31.5 billion.
“I think expectations are low going in to the earnings result, about 10% sequential revenue decline which reflects moderating growth in the global handset market,” Kumar said Monday. “In the March quarter, global unit shipments dropped to about 10% growth year-on-year – about half the growth of the preceding four quarters.”
Kumar said Texas Instruments’ results can’t match Intel’s .
“I think the key difference here is Intel posted significant share gains,” Kumar said. “With Texas Instruments, they are losing share with key accounts – Nokia and Ericsson – to STMicroelectronics and Infineon Technologies. That’s going to impair the performance. The shift to low end in the handset market is going to impact the performance. On the positive side, we see improvement in the analog business. Product cycles in the second half should benefit performance that will lead to year-on-year growth rate in the December quarter.”
Kumar said the hope is that Microsoft’s introduction of its new Vista operating system will spur corporate upgrades in the second half of 2007 and into 2008. But so far, he said most IT spending has been made by small business and consumers.