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Texas Instruments CEO and president ups profit forecast

The president and chief executive of Texas Instruments Inc, which supplies chips used in more than half the world's cellphones, raised the company's profit expectations on Wednesday and said he expects strong growth in coming years.

Without offering an exact time frame, Rich Templeton said Texas Instruments sees gross profit margins, which reached 51 percent in the first quarter, reaching 55 percent.

"We believe it's something that could be achieved over the next few years," he said. "I do not know what the precise timing will be, but we'll hold ourselves accountable to try to strive to those types of levels."

The firm's shares surged US$1.51, more than 4 percent, to a 12-month high of US$36.68 in midday trading. Shares have ranged from US$26.77 to US$35.50 in the past year.

"Five years in a row now we've been able to outgrow the semiconductor market," said Templeton, speaking at the company's annual analysts meeting in a suburban Dallas, Texas, hotel. "We continue to increase the number of people we have working on new, smaller and creative areas that have great potential in the long term."

Last month, Dallas-based Texas Instruments topped Wall Street's earnings estimate, despite a 12 percent drop in first-quarter earnings.

The company also forecast second quarter revenue ranging from US$3.32 billion to US$3.60 billion on earnings of US$0.39 to US$0.45 per share. It plans to release a mid-quarter update June 11.

Templeton also touted the company's analog chip business, which brings in 40 percent of total sales, as a major source of growth in the coming years.

Texas Instruments is the market leader in analog chips but only has about 13 percent of the overall US$35 billion market, he said. "I think it is an opportunity we can continue to build on and we can put together what could turn out to be the most unique semiconductor company in the world as we go into the next decade."
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