Selasa, 25 Maret 2008

DALLAS - Texas Instruments Inc., which makes chips used in about half the world's cell phones, lowered its range of expected profits and sales in the first quarter, citing a key customer's decision to cut orders.

Company officials on Monday declined to identify the customer, other than to indicate it is a maker of wireless phones.

Two major wireless customers of Texas Instruments -- Nokia Corp. and Sony Ericsson -- both announced last year they would begin ordering some chips from other semiconductor companies instead of relying solely on the Dallas-based company.

Texas Instruments said it expected to earn between 41 cents and 45 cents per share in the quarter ending March 31, 3 cents lower than the midpoint of a January forecast.

Analysts expected 46 cents per share, according to a survey by Thomson Financial.

Texas Instruments also said sales would total between $3.21 billion and $3.35 billion, or about $130 million below the midpoint of the January estimate. Analysts had forecast $3.4 billion.

Back in January, the company said it would earn 43 cents to 49 cents per share on sales of $3.27 billion to $3.55 billion in the first quarter.

Texas Instruments shares had risen 35 cents, or 1.2 percent, to $29.65 before the first-quarter update was released after hours.

The shares fell $1.15, or 3.9 percent, to $28.50 in after-hours trading. That's close to the low point in the 52-week range of $28 to $39.63.

If the new forecast is accurate, Texas Instruments' revenue will fall 6 to 10 percent compared to the fourth quarter but rise 1 to 5 percent compared to the first quarter a year ago. Earnings would also decline from the fourth quarter but remain above the year-ago profit of 35 cents per share.

Vice President Ron Slaymaker said the lowered forecast was due to weaker demand from makers of high-end wireless phones, "mostly a particular customer" whose decision was made in the past week or so.

Slaymaker insisted his company is not losing sales to rival chip suppliers but is suffering slowing in demand for advanced wireless phones.

He declined to say whether Texas Instruments expects the slowdown to last beyond March but said the company would provide details next month.

Dallas-based Texas Instruments suffered setbacks last year when Nokia, its largest customer, and Sony Ericsson decided to seek other chip suppliers.

Texas Instruments sells chips for both low-end mobile phones used in emerging markets such as China and India and advanced, feature-laden models more common in developed countries. The latter are more profitable, although emerging markets offer the potential for heavy sales volumes and trade-up consumers in coming years.

Analysts said Nokia was probably the only customer large enough to cause such a quick downward revision in TI's revenue forecast.

Cody Acree, an analyst for Stifel Nicolaus & Co., said Nokia "sees the exact same economic uncertainty that we all do. This could definitely be a leading indicator of what's to come if you want to view it in a more pessimistic light."

Acree said, however, he took hope in Texas Instruments saying that sales in the rest of its wireless division and its big business in analog chips were still running at expected levels.

J. Steven Smigie, an analyst with Raymond James & Associates, estimated that Texas Instruments could have about $22 worth of components in advanced 3G or third-generation phones, making a slowdown in the higher end of the market more damaging.

"I wouldn't call it catastrophic, but it's a little disappointing that it's 3G handsets and not your lower-end phones," he said. "Generally your higher-end customers hold up a little better in tough times."

The company also said Monday that its educational unit, which makes the calculators for which the company was once best known, would generate first-quarter sales between $70 million and $90 million, unchanged from an earlier forecast.

Texas Instruments also makes chips for digital cameras, televisions and other electronics.


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