TXN is a must........"The first quarter was a good start for TI," Bill Aylesworth, chief financial
officer, said in a conference call. "The top 5 reasons for that are we broke
historical trends, our gross margin was up, broadband communication
revenue more than doubled from the fourth quarter to the first quarter, we
saw excellent growth in the products we sell to the mass market, and in
February, we introduced the highest-performance and lowest-power
DSPs."
TI increased production of its digital signal processors for broadband
applications during the quarter. Also in the first quarter, TI announced two
new cores to enhance the DSPs. DSP revenue rose 50 percent from the
year-ago period and 2 percent from the fourth quarter, breaking the
seasonal trend of declining revenue from the last quarter of 1999 to the
first quarter of 2000.
Gross margin expanded to 49.5 percent, a gain of 3 percent. While
operating margin was down sequentially by 0.4 percent to 21.7 percent,
Aylesworth said that the company still expects to reach a margin of 25
percent by the end of the year.
Aylesworth also said the company remains on track to ship a million
application digital subscriber line modem ports through the first half of
2000.
In his analyst's report, Wu wrote that "we find the semiconductor industry
fundamentals stronger than at anytime since 1993, with unseasonal
strength in first quarter 2000 propelled by robust end-market demand.
The Y2K-delayed PC industry strength in the second quarter will add to
demand for TI's semiconductor products."
TI said it is raising its capital-expenditure forecast to $2.5 billion, reflecting
the belief that strong demand will continue for its digital signal processors
and analog products. Within the semiconductor division, TI expects
hard-disk drive revenue to decline sequentially but the loss should be
offset by growth in revenue from wireless and broadband.
"Toward the next quarter, we expect to accelerate revenue growth
overall, and semiconductor will drive this growth," Aylesworth said.
Lisa Sanders is an online reporter for CBS MarketWatch. |
