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Texas Instruments Sees Revenue Rise in Third Quarter

Posted on: Tuesday, 25 October 2005, 12:00 CDT

By Aman Batheja, Fort Worth Star-Telegram, Texas

Oct. 25--Texas Instruments reported an 11 percent increase in revenue for its third quarter Monday, citing strong sales for its products that help run cellphones and other consumer electronics.

The Richardson electronics giant reported $3.59 billion in quarterly revenue, or 38 cents per share of common stock. Analysts were expecting on average 40 cents per share on $3.55 billion in revenue.

TI's semiconductor segment grew 13 percent from the previous quarter, with the company noting strong demand for its digital signal processors used in most cellphones.

The company also noted growth in other areas. Wireless revenue was up 16 percent from the previous quarter and 20 percent from the year-ago quarter. Revenue from TI's digital light processors, or DLP chips, was up 41 percent from the previous quarter and even with the year before. DLP chips are used in big-screen TVs.

The company reported an all-time high operating profit and operating margin at $815 million and 22.7 percent, respectively.

In a conference call with analysts, Ron Slaymaker, vice president and manager of investor relations, said he expected continued growth in the wireless market, especially in the segments focused on the newest features and functions and emerging markets such as India and China, where demand is strong for low-priced phones with basic features.

The strong earnings were contrasted by a grimmer fourth-quarter outlook of 36 to 40 cents per share on revenue of $3.425 billion to $3.715 billion.

Wall Street expectations were 41 cents per share for the quarter on revenue of $3.63 billion.

The company attributed the lower forecast partially to lower inventory levels because of higher-than-expected shipments in the third quarter.

"Consequently, our ability to respond to new quarter surges could be somewhat limited," Slaymaker said.

The company's shares (ticker: TXN) rose 40 cents, or 1.3 percent, to $30.92 during regular trading on the New York Stock Exchange, but they plunged $1.27, or 4.11 percent in after-hours trading to $29.65.

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Copyright (c) 2005, Fort Worth Star-Telegram, Texas

Distributed by Knight Ridder/Tribune Business News.

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TXN,

Source: Fort Worth Star-Telegram (Fort Worth, Texas)

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