Texas Instruments Q3 profit doubles

Texas Instruments Inc, whose chips power half the mobile phones sold last year, said third-quarter earnings more than doubled and profit this quarter will exceed forecasts.

Net income rose to US$447 million, or US$0.25 a share, from US$188 million, or US$0.11, a year earlier. Sales rose 13 percent to US$2.53 billion from US$2.25 billion, the Dallas-based company said in a statement.

Profit this period will beat analysts' estimates, and sales will rise as much as 26 percent, the company said. Chief executive Tom Engibous has boosted sales of semiconductors that run mobile phones with cameras and MP3 audio players. Texas Instruments gets about a quarter of its annual sales from chips used in phones made by clients including Nokia Oyj.

"We were all expecting good news, but they just knocked the cover off the ball," said Greg Barlage, a chip analyst at Stein Roe Investment Counsel, which manages US$7.5 billion and owns Texas Instruments shares.

"The boost was clearly wire-less," he said.

A gain from selling shares of Micron Technology Inc boosted third-quarter earnings. Excluding the gain, profit would have been US$0.12 a share, Thomson Financial said. On that basis, analysts expected an average of US$0.9, according to Thomson.

Texas Instruments has cut costs by firing workers and hiring companies such as Taiwan Semiconductor Manufacturing Co (台積電) to make some of its most complicated chips. In factories it owns, Texas Instruments is building chips on larger, 300mm wafers.

Engibous has focused on sales of more-expensive chips that help cell phones and wireless devices connect to the Web. Rising consumer demand for the latest handsets helped insulate the company from some of the slumps in computer-related markets.

Sales of chips used in wireless devices grew 30 percent from the year-earlier quarter. Demand for semiconductors used in so-called smart phones and electronic organizers drove the increase, chief financial officer Kevin March said in an interview.