Nokia, Texas Instruments Post Positive Quarterly Earnings

Sep. 10–Top cellphone maker Nokia and its leading chip supplier Texas Instruments gave investors positive mid-quarter earnings updates Tuesday, suggesting that demand for cellphones continues to improve.

Both companies said third-quarter earnings would be slightly higher than previous expectations, citing strong sales of mobile phones. The industry is expected to sell more than 450 million phones this year, as consumers snap up new color-screen models and camera phones.

However, Wall Street was not pleased to hear that revenue in Nokia’s mobile phone division would be flat because of increased sales in its cheaper models. Nokia shares dropped 6 percent, or $1.07, to close at $16.00 on the New York Stock Exchange.

“Volumes are strong, but the average selling prices keep cooling,” Handelsbanken analyst Petri Arjama told Bloomberg News.

Nokia’s phone sales have also been hurt by the depreciation of the U.S. dollar at a time when the company is increasing its presence in the North American market. The company has its Americas headquarters in Irving and employs about 4,000 people in North Texas.

“In the third quarter, we basically see the U.S. and the Americas market overall have a bigger portion of our sales than in the second quarter,” Olli-Pekka Kallasvuo, Nokia’s chief financial officer, said in a conference call with analysts Tuesday.

Several industry analysts said they expect Nokia to raise its third-quarter sales estimates after several chip suppliers increased their forecasts. After the market closed Tuesday, Dallas-based Texas Instruments said third-quarter earnings would be in the range of 20 cents to 22 cents per share. Its earlier guidance was 19 cents to 23 cents per share.

The company — which provides chips for almost half of the wireless phones produced — said revenue in its semiconductor division should be between $1.99 billion and $2.07 billion as customers order more chips for wireless and consumer electronic products.

“What we’re really experiencing from a broad basis is that demand is stronger than what we had previously expected for all of our semiconductor products,” Bill Aylesworth, TI’s chief financial officer, told analysts on a conference call.

TI’s new earnings estimates include a previously announced sale of 24.7 million share of Micron Technology common stock and a research and development charge of $23 million related to TI’s July acquisition of Radia Communications.

TI shares declined 71 cents to close at $25.32 on the New York Stock Exchange on Tuesday.

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