TXN's Spin ($31-$33) Cap=56Bil
17:46 ET TXN Texas Instruments (32.13 +0.33) -- Update --
On call, company says operating margin will increase in Q2 due to higher sales...maintains its cap-ex budget of $800 mln. Q1 was below forecast, but that should be made up later in the year...stock at 33.14.
Texas Instruments Reports 1Q Loss
By DAVID KOENIG
AP Business Writer
Texas Instruments Reports First-Quarter Loss, Expects Growth for Second Quarter
DALLAS (AP) -- Texas Instruments Inc. said Monday it lost money in the first quarter but saw orders rise, and executives declared the company has turned the corner after a huge slump in semiconductors.
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Officials predicted that revenue will grow 10 percent in the second quarter and add 6 cents per share in profit.
Texas Instruments, whose computer chips power more than half of the world's cellular phones, said it lost $38 million, or 2 cents per share, in the first quarter, compared to a gain of $230 million, or 13 cents a share, a year earlier.
The company said it would have earned $24 million, or 1 cent per share, after excluding amortization of acquisition costs and other special charges.
On that "pro forma" basis, analysts surveyed by Thomson Financial/First Call had expected the Dallas-based company to break even.
Revenue was $1.83 billion, down from $2.53 billion a year earlier but 2 percent higher than in the fourth quarter.
Texas Instruments said orders grew 20 percent, to $1.9 billion, leading the company to predict that revenue and earnings will grow in the from the first quarter to the second.
Company officials said the increase in orders indicated that a variety of manufacturers have finally worked down their inventories of computer chips.
The inventory glut has been the biggest pressure on Texas Instruments' earnings for several quarters, said Ron Slaymaker, the company's manager of investor relations.
"We think we can say goodbye to the bottom," Slaymaker said. "We think this is looking pretty solid."
Chairman and chief executive Tom Engibous said in a written statement, "We have turned the corner toward growth."
Equipment makers cut orders from TI last year when they couldn't sell their own products using the chips. Worldwide sales of semiconductors fell more than 30 percent last year, the sharpest decline ever, according to an industry trade group.
Cody Acree, an analyst with Frost Securities, said TI's upbeat forecast mirrored a recovery in the broad semiconductor market -- the company's chips are used in a mix of industrial and consumer products.
"We're very encouraged. TI is benefitting from a good turn in the economy," Acree said.
The company's prediction that earnings could grow 6 cents per share is likely to lead analysts to revise their forecasts. They had been looking for 3 cents per share in pro forma profit for the April-June quarter.
While Texas Instruments benefitted in the first quarter from inventory reductions, officials said the long-term recovery will depend on economic growth, which they assume would boost demand for computers, wireless devices, telecommunications networks and other users of computer chips.
The financial results were released after the end of regular trading on the New York Stock Exchange, where TI shares rose 33 cents to $32.13. In after-hours trading, shares rose 92 cents, nearly 3 percent.
17:44 ET TXN Texas Instruments (32.13 +0.33) -- Update --
On conference call, company says it is seeing positive signs for revenue growth. Book-to-bill was above one for each segment....Orders were up 20% sequentially....stock at 33.10. |
