DALLAS (CBS.MW) - Texas Instruments, one of the world's leading semiconductor manufacturers, beat Wall Street's first-quarter profit estimates late Tuesday, but the company said revenue had declined as expected and that it would eliminate 2,500 employees, or 6 percent, of its work force because of economic uncertainty.
Shares of Texas Instruments, which closed at $34, up 99 cents, ahead of the announcement, declined to $33.10 a share in after-hours trade.
Late Tuesday, TI (TXN: news, msgs, alerts) , the market leader in digital signal processors (DSP) and analog chips, said it earned $317 million, or 18 cents a share, compared to $494 million, or 28 cents a share, in the first quarter of 2000. Analysts polled by First Call/Thomson Financial expected the chipmaker to earn 16 cents a share, on average.
TI, which warned in late February that sales would decline 20 percent from the fourth quarter, reported revenue of $2.5 billion vs. $2.8 billion in the year-ago quarter. In the fourth quarter of 2000, TI posted revenue of $3.03 billion, an improvement over the prior year period but a decline from the third quarter. The trend continued in the first quarter, and TI said it expects another 20 percent sequential decline in the second quarter on weakness in semiconductors.
Much as it said in February, TI, which makes the DSPs in more than half of the wireless phones in the world, said an excess of customer inventories and weak demand for end-equipment resulted in a slowdown in orders for its products.
On Tuesday, TI said it would cut 2,500 jobs, or 6 percent of its 42,400-employee base, to cut costs. TI expects to save $400 million a year when the move is completed. In February, TI said it would cut 2,600 employees through a voluntary retirement program designed to help the semiconductor giant cut costs. In March, the chipmaker slashed 600 jobs from its payroll when it closed a factory in Santa Cruz, Calif.
On a positive note in the first quarter, sequential broadband revenue rose by 15 percent on strength in demand for high speed Internet access through digital subscriber lines.
Looking ahead, TI, which warned twice before reporting the March quarter, said it would cut research and development in 2001 to $1.6 billion from $1.7 billion. The company also reduced capital expenditures to $1.8 billion from $2 billion. |
