Texas Instruments Profit Gains 34%; Sales Disappoint
Enviado: 24/1/2006 0:26Texas Instruments Profit Gains 34%; Sales Disappoint (Update2)
Jan. 23 (Bloomberg) -- Texas Instruments Inc., the world's biggest maker of mobile-phone chips, said fourth-quarter profit rose 34 percent. The shares fell as sales disappointed investors.
Net income gained to $655 million, or 40 cents a share, from $490 million, or 28 cents, a year earlier, the Dallas-based company said today in a statement distributed by PR Newswire. Sales rose to $3.59 billion from $3.15 billion, and may trail estimates by as much as $350 million in the current quarter.
Chief Financial Officer Kevin March said fourth-quarter sales were at the lower end of the company's December forecast because assembly and testing facilities weren't able to keep up with demand. The sales shortfall follows last week's announcement by Intel Corp., the world's biggest chipmaker, which reported revenue that trailed its own forecasts.
``It's easy for investors to get scared these days,'' said David Wu, an analyst with Global Crown Capital in San Francisco who rates the shares ``overweight'' and said he doesn't own them. He spoke before the announcement. ``We've had a run on these chip stocks and people want to sell.''
Shares of Texas Instruments fell $1 to $30.70 at 5:24 p.m. in extended trading from a close of $31.70 on the New York Stock Exchange. The stock gained 30 percent last year.
Texas Instruments last month said profit would be 38 cents to 40 cents a share, at the top end of its previous forecasts. That included 3 cents a share related to stock-option costs. The company predicted sales of $3.56 billion to $3.71 billion.
Sales Forecast
First-quarter sales will be $3.11 billion to $3.38 billion, and earnings per share will be 29 cents to 33 cents, Texas Instruments forecast. The per share figure includes about 4 cents for stock-based compensation. The average estimate of 36 analysts surveyed by Thomson Financial predicts sales of $3.46 billion.
CFO March said the discrepancy in sales may be related to the sale of Texas Instruments' sensors and controls unit.
In the fourth quarter, profit excluding stock option costs was 43 cents, beating the 42-cent estimate of Michael McConnell, of Pacific Crest Securities in Portland, Oregon, who is among the most accurate semiconductor analysts according to StarMine Corp.
Analysts surveyed by Thomson Financial expected a profit of 42 cents, the average estimate in a 30-person survey. Thomson wouldn't say what was included in that estimate. About 38 analysts expected sales of $3.64 billion.
``The upside in the semiconductors didn't happen,'' said Jane Snorek, who helps manage $110 billion including Texas Instruments shares at US Bancorp Asset Management in Milwaukee. ``Some people were expecting it given the strong handset sales in the Christmas season.''
Qualcomm Inc., Texas Instruments's closest competitor in making chips for cell phones, on Dec. 8 raised its sales and profit forecast on a surge in holiday sales. San Diego-based Qualcomm reports complete first-quarter earnings on Jan. 25.
Sensors Sale
Chief Executive Officer Rich Templeton, 47, earlier this month agreed to sell Texas Instruments' sensors and controls business, which makes parts for air conditioners and cars to Bain Capital LLC for $3 billion. The move allows the company, a former defense contractor, to focus primarily on semiconductors, a more profitable business.
The sensors and controls business contributed about a 10th of the sales of the chip unit, and was growing half as fast, according to Robert W. Baird analyst Tristan Gerra.
Of 46 analysts who rate Texas Instruments, 26 suggest buying the stock, 18 advise clients to hold the shares and two say they should sell.
Jan. 23 (Bloomberg) -- Texas Instruments Inc., the world's biggest maker of mobile-phone chips, said fourth-quarter profit rose 34 percent. The shares fell as sales disappointed investors.
Net income gained to $655 million, or 40 cents a share, from $490 million, or 28 cents, a year earlier, the Dallas-based company said today in a statement distributed by PR Newswire. Sales rose to $3.59 billion from $3.15 billion, and may trail estimates by as much as $350 million in the current quarter.
Chief Financial Officer Kevin March said fourth-quarter sales were at the lower end of the company's December forecast because assembly and testing facilities weren't able to keep up with demand. The sales shortfall follows last week's announcement by Intel Corp., the world's biggest chipmaker, which reported revenue that trailed its own forecasts.
``It's easy for investors to get scared these days,'' said David Wu, an analyst with Global Crown Capital in San Francisco who rates the shares ``overweight'' and said he doesn't own them. He spoke before the announcement. ``We've had a run on these chip stocks and people want to sell.''
Shares of Texas Instruments fell $1 to $30.70 at 5:24 p.m. in extended trading from a close of $31.70 on the New York Stock Exchange. The stock gained 30 percent last year.
Texas Instruments last month said profit would be 38 cents to 40 cents a share, at the top end of its previous forecasts. That included 3 cents a share related to stock-option costs. The company predicted sales of $3.56 billion to $3.71 billion.
Sales Forecast
First-quarter sales will be $3.11 billion to $3.38 billion, and earnings per share will be 29 cents to 33 cents, Texas Instruments forecast. The per share figure includes about 4 cents for stock-based compensation. The average estimate of 36 analysts surveyed by Thomson Financial predicts sales of $3.46 billion.
CFO March said the discrepancy in sales may be related to the sale of Texas Instruments' sensors and controls unit.
In the fourth quarter, profit excluding stock option costs was 43 cents, beating the 42-cent estimate of Michael McConnell, of Pacific Crest Securities in Portland, Oregon, who is among the most accurate semiconductor analysts according to StarMine Corp.
Analysts surveyed by Thomson Financial expected a profit of 42 cents, the average estimate in a 30-person survey. Thomson wouldn't say what was included in that estimate. About 38 analysts expected sales of $3.64 billion.
``The upside in the semiconductors didn't happen,'' said Jane Snorek, who helps manage $110 billion including Texas Instruments shares at US Bancorp Asset Management in Milwaukee. ``Some people were expecting it given the strong handset sales in the Christmas season.''
Qualcomm Inc., Texas Instruments's closest competitor in making chips for cell phones, on Dec. 8 raised its sales and profit forecast on a surge in holiday sales. San Diego-based Qualcomm reports complete first-quarter earnings on Jan. 25.
Sensors Sale
Chief Executive Officer Rich Templeton, 47, earlier this month agreed to sell Texas Instruments' sensors and controls business, which makes parts for air conditioners and cars to Bain Capital LLC for $3 billion. The move allows the company, a former defense contractor, to focus primarily on semiconductors, a more profitable business.
The sensors and controls business contributed about a 10th of the sales of the chip unit, and was growing half as fast, according to Robert W. Baird analyst Tristan Gerra.
Of 46 analysts who rate Texas Instruments, 26 suggest buying the stock, 18 advise clients to hold the shares and two say they should sell.