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Tech Check
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CNBC.com |
Wall Street is anticipating a 2-cent loss on $1.9 billion in revenue, which is a pretty brutal and swift turnaround from the 49-cent profit the company reported on $3.3 billion during the same period last year. That drop-off-the-cliff is tantamount to the poor coyote during those Road Runner cartoons. Beep beep!
That said, there are some glimmers of hope working in Texas Instruments' favor, not the least of which was positive comments from Nokia just last week that the wireless world has finally seen bottom; positive comments from Intel CEO Paul Otellini that the PC industry has finally seen bottom; and TI's own news last month that it would narrow guidance with a slightly higher mid-point of the range. For its part, TI anticipated a revenue range of $1.79 billion to $2.05 billion, but as much as an 8-cent a share loss.
Still, if you agree that the company's first quarter was as bad as the Street anticipates, and you accept what Nokia had to say about the smart phone market, then maybe this is an opportunity to snap up TI at the bottom? And if you take the Street's advice that you're looking for leaders in their particular market segments that have been hurt deeply by the economic morass, then it stands to reason that TI might be positioned nicely for those of you with a longer time horizon than merely this week or even this quarter.
That's not to say that Texas Instruments doesn't see its fair share of competition.Qualcomm and Broadcom have both been surging, with Broadcom up a staggering 45 percent over the past five weeks. Some of the analysts I'm talking to suggest those two issues have gotten out ahead of themselves and that TI might offer more upside, and a bigger long-term opportunity than the others. Still, the steep run-up, according to some analysts, might lead to a fairly heavy move to the downside with news later today as investors seek to bank those profits, and sell on the news.
But most analysts I'm chatting with suggest these stocks, even with the recent run, are far closer to their bottoms than to their tops, which means opportunities still might exist. Along those lines, Charter Equity's Ed Snyder thinks "inventory burn-off and restructuring charges in Q1 should lead to better Q2 guidance," and he maintains his "buy" on the shares.
He's expecting $1.9 billion and a 3-cent loss, along with restructuring charges of $80 million in tonight's report. He says revenue guidance over $2 billion and EPS higher than 3 cents would be "bullish" for shares. He'd be "bearish" if the company offers up revenue under $1.88 billion and EPS under a penny or a loss.
Questions? Comments?
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