Just How Fast Are Those DSPs Selling?
I thought I'd scrounge around in TI's latest earnings report and
try and figure out what the big guys saw in it when they dropped
the stock like a hot potatoe after it came out. I could only
find one thing: the DSP story seems to be cooling down.
TI isn't in the habit of making it easy to figure out how much
DSP business they actually do. They give you a total revenue
number, and approximate ratios, and you have to cypher it out
for yourself. As your ever constant, but severely underpaid,
overworked and unappreciated servant, I've done the
calculations for you (with an HP 32SII RPN Scientific calculator,
of course):
From TI's latest report:
TI Reports Increased Profits for Third Quarter 1997
TI ti.com
We get Revenues for the third quarter of 1997 were $2500
million and Semiconductor revenues, including royalties
from semiconductor licensees, now represent about 84 percent
of TI's revenues. Digital signal processors plus mixed-signal/
analog represent about 40 percent of semiconductor.
Therefore, semiconductor revenues for 3Q97 were about
$2500M * .84 = $2100M, and DSP revenues were about
$2100M * .40 = $840M.
Now lets look at the previous quarter's data.
From the edgar files: QUARTERLY REPORT
Edgar sec.gov
We find Revenues for the second quarter of 1997 were
$2559 million and Semiconductor revenues were up
17 percent from the second quarter of 1996, and up 10 percent
from the first quarter of 1997. The major portion of the increase
was due to higher sales of digital signal processing solutions,
which represent more than 40 percent of total semiconductor
revenues. With the completed divestitures, semiconductor
now constitutes about 80 percent of TI's total revenues.
Therefore, semiconductor revenues for 2Q97 were about
$2559M * .80 = $2047M, and DSP revenues were more than
$2047M * .40 = $819M.
So second quarter DSP sales were more than $819M and third
quarter DSP sales were about $840M. The increase was "about
less than" 2.56%.
This is an annualized gain of less than 11%. This doesn't jibe
with an increase in DSP business of 30 to 40% per year, unless
TI is rapidly losing market share. So maybe this past quarter
was a really bad quarter.
Or maybe I made a mistake in calculating. I know that the
employees of TI are reading this post. How's about sending
in a correction? Or maybe the institutional investors that sold
this stock have a different read on the revenue numbers?
How's about some more analysis.
-- Carl |
