Wed, Jan 25, 2012 - Page 5 News List

Texas Instruments’ profit, sales exceed estimates


Texas Instruments Inc’s fourth-quarter sales and profit declined less than analysts had predicted, signaling that the market for electronic components is bottoming out.

Net income fell 68 percent to US$298 million, or US$0.25 a share, from US$942 million, or US$0.78, a year earlier, the Dallas-based company said on Monday in a statement. Sales dropped 3 percent to US$3.42 billion. Analysts had predicted profit of US$0.23 a share and revenue of US$3.25 billion on average, according to data compiled by Bloomberg.

Texas Instruments is the world’s largest maker of analog chips — semiconductors that are key components in everything from satellites to refrigerators — making its earnings a broad indicator of demand across the economy. While the company isn’t predicting a surge in orders, the industry may be nearing the end of a sales slump.

First-quarter revenue will be US$3.02 billion to US$3.28 billion, the company predicted. Analysts on average had estimated US$3.22 billion. Profit will be US$0.16 to US$0.24 a share, Texas Instruments said.

The company completed its US$6.4 billion purchase of National Semiconductor Corp in September, so the most recent period is the first full quarter to reflect the acquisition’s financial performance.

“We are positioning ourselves for a resumption of growth in the second quarter,” chief financial officer Kevin March said in an interview. Customers are beginning to replenish their inventories of chips, he said. Still, “it’s a little early for us to declare victory.”

The company has been phasing out its wireless baseband products, which serve as the communications processor in mobile phones, letting it focus on more profitable areas. Revenue from that market will drop to US$75 million in the first quarter from US$279 million in the previous three months, March said.

Excluding those sales, the company expects revenue to decline about 2 percent, compared with a typical sequential drop of 4 percent.

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