Wed, Jun 12, 2013 - Page 15 News List

Texas Instruments says revenue, profit may miss estimates

Bloomberg

Texas Instruments Inc, the largest maker of analog chips, predicted second-quarter profit and sales that may fall short of analysts’ most bullish estimates as some consumer-electronics makers hold off on component purchases.

Profit in the current period will be US$0.39 to US$0.43 a share on revenue of US$2.99 billion to US$3.11 billion, the Dallas-based company said in a statement on Monday.

On average, analysts had estimated a profit of US$0.41 and sales of US$3.06 billion, according to data compiled by Bloomberg. The company said in April profit would be US$0.37 to US$0.45 a share on revenue of US$2.93 billion to US$3.17 billion.

While orders for chips used in industrial machinery and cars have continued to grow, demand is weak for semiconductors used in personal computers and consumer devices such as game consoles, vice president Ron Slaymaker said on a conference call.

Texas Instruments’ chips go into everything from kidney-dialysis machines to DVD players, making its earnings an indicator of demand across the electronics industry.

“PCs will remain a trouble spot for the company,” said Bill Kreher, an analyst at Edward Jones & Co in Des Peres, Missouri. “There may have been an expectation for a reset on guidance and they just narrowed it.”

Texas Instruments shares slipped as much as 3 percent to US$35.52 in late trading, after rising 1.2 percent to US$36.62 at Monday’s close in New York. The stock has gained 19 percent this year, compared with a 23 percent gain in the Philadelphia Semiconductor Index.

Under CEO Richard Templeton, Texas Instruments is exiting the market for digital chips used in smartphones and tablets. Cutting that division is causing total sales to contract from a year earlier.

The company is focusing on the market for analog chips, the semiconductors that convert what happens in the real world — such as touch, sound and pressure — into electronic signals.

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