Texas Instruments Lifts Low End of Profit Forecast
Updated from 5:01 p.m. EST
Texas Instruments (TXN) bumped up the low end of its earnings outlook Monday, and said business in the wireless market is stronger-than-expected at this point in the fourth quarter.
The Dallas-based chipmaker said December orders for chips used in both high-end cell phones as well as low-priced models have not slackened from prior months, hinting at a healthy holiday sales season for cell phones.
TI's encouraging comments about wireless demand follow National Semiconductor's (NSM) earnings results last week, in which the company reported an 18% sequential increase in sales of cell phone chips.Shares of TI rose 4.5% in recent after-hours trading to $34.15. In its midquarter update, the Dallas-based chipmaker said earnings in the current quarter will range between 50 cents and 54 cents a share vs. its previous guidance of 48 cents to 54 cents. The midpoint of the new range -- 52 cents -- is a penny higher than the average analyst expectation. In a conference call with analysts Monday, TI investor relations head Ron Slaymaker said the company was benefiting from recent operating expense cuts, particularly the decision to outsource the manufacturing process for its digital chips. TI's increasing focus on high-performance analog chips, which carry plump profit margins, is also bolstering the company's bottom line. Slaymaker said demand for analog and high-performance analog chips continues to be solid in the current quarter, in keeping with the company's original projections.
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