Texas Instruments Profit Up 16%, Exceeding Forecasts


Texas Instruments said quarterly earnings grew 16 percent from the year-ago quarter thanks to strong analog chip sales, but the mobile chipmaker forecast revenues below analysts' estimates, sparking a drop in its stock.

Texas Instruments
L.m. Otero

TI, which makes everything from calculators to chips for the latest televisions, forecast fourth-quarter revenue of $3.4 billion to $3.68 billion, compared with the average analyst view for revenue of $3.7 billion, according to Reuters Estimates.

Shares fell 2.8 percent to $33.30 after the news.

Profit from continuing operations rose to $758 million, or 52 cents per share, from $686 million, or 45 cents a share.

But revenue fell to $3.66 billion from $3.76 billion in the year-ago period, when the result was boosted by excess ordering by customers. The ordering sparked an inventory glut that TI cleared this year.

On Sept. 11, TI forecast earnings from continuing operations of 49 cents to 53 cents per share on revenue of $3.56 billion to $3.72 billion. Analysts were looking for earnings of 50 cents on revenue of $3.66 billion, according to Reuters Estimates.

TI forecast fourth-quarter earnings of 48 cents to 54 cents per share.

Analysts, on average, expected earnings before unusual items of 50 cents per share. It was not immediately clear if the figures were comparable.

TI shares are down about 4 percent since September on investor disappointment over the company's revenue outlook.  Investors have also been worried about phone maker Nokia's decision to sign up new suppliers besides TI.

Texas Instruments said last month it plans to lay off 191 Dallas workers whose manufacturing jobs are being eliminated and who couldn't find other positions at the company.

The layoffs will begin in early November and be spaced out until the end of January. At the time of the announcement, the company was also finishing the last of 233 layoffs from two other facilities in Dallas by the end of the year.

Investors have also been concerned with slowing demand for its wireless chips from Motorola, one of its top customers.