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Tech Check
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Here's a surprise from a source that no one really expected: Texas Instruments beats on the top and bottom lines, and then raises expectations for the company's second fiscal quarter. Instead of a 3-cent a share loss, Texas Instruments [TXN
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] reports a 7-cent a share profit. There are 6 cents a share in restructuring charges which would take the figure down to a penny a share, but the apples to apples numbers as far as the Street is concerned is 7 cents. Even at the penny a share, the company still would've beaten expectations.
Looking ahead, the company offered a broad range for EPS in the second quarter, but either way, it's far higher than analysts were expecting. TI now anticipates 1 cent to 15 cents a share in profits on $1.95 billion to $2.4 billion in revenue. Analysts expected just shy of $2 billion in revenue so that topline expectation from the company is more optimistic than previously thought.
"It's a good number, a very good number," says Cody Acree of Stifel Nicolaus. "Orders coming up, inventories coming down. You can cut and paste Intel and TI. There's a very similar tone, but TI was probably even stronger."
He says TI is being cautious about the economic climate, but is predicting stabilization after a sharp drop-off in demand, and there are signs of a broad-based recovery in its industry.
If there's one problem for the company, it comes from its wireless chip sales. Texas Instruments is a leader in handset chips, and following Nokia's [NOK
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] optimistic call of an industry bottom last week, there was some thought that TI's wireless business would have performed better than expected. Analysts were looking for anywhere from $650 million to $700 million in wireless chip sales. Instead, TI says the figure was $551 million.
That said, if Nokia is correct, the wireless business likely bottomed during the first quarter, where TI suffered those weak sales in the unit. And it could be that TI's improved outlook may be due in part to a strengthening wireless chip set business.
"They burned 20 percent internal inventory and $132 million in channel inventory during the quarter, and a lot of that was wireless," says Acree. "That's the Delta. It sets them at a base and they can go back and match demand whatever that happens to be."
Couple this news with Intel's [INTC
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] report and the company's commentary and the chip business is starting to look interesting again.
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes