Barron's assesses TI outlook
By Myra P. Saefong, CBS.MarketWatch.com
Last Update: 3:33 PM ET Aug. 4, 2001
NEW YORK (CBS.MW) -- Shares of Texas Instruments have fallen 40 percent in the past year, but the semiconductor maker's outlook could brighten on plans to emerge from this year's chip slump, a report from this week's Barron's said.
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The year 2001 has been a bust for the company (TXN: news, chart, profile), the article said, as customers bought 80 million more chip sets for mobile telephones than they were able to use, according to CFO William Aylesworth.
Texas Instruments reported a second quarter loss of $197 million, or 11 cents a share in late July. A year ago it made $1.3 billion in the second quarter. Its pro forma profit, excluding special charges, reached $50 million, or 3 cents a share. That was 1 cent better than the average analyst estimate, according to First Call/Thomson Financial. See full story.
The company sees continued softness in the third quarter as customers further reduce inventory, Texas Instruments said at the time of the second-quarter results release. However, the Semiconductor Industry Association has forecast that a rebound in the chip industry could come in the fourth quarter, Barron's said.
TI is betting on that rebound, so it's building new chip factories, including a $2 billion plant in Dallas that's aimed at high efficiency, the article said.
Texas Instruments' earnings are expected to bottom out at 16 cents a share this year on a pro forma basis, but if the shares repeat their historic pattern of bouncing to a peak that's four to six times higher than their lows, the stock could hit or even surpass its previous high of $100, according to Barron's.
On Friday, shares of the Dallas firm slipped 65 cents to close at $37.50, well off its 52-week low of $26.26. |
