JPMorgan Tech Conference: TI's CEO Says Broadband a Lonely Bright Spot
SAN FRANCISCO -- Whatever doesn't kill you, just makes you stronger.
That's the line Texas Instruments (TXN) CEO Tom Engibous was delivering Monday morning at the JPMorgan H&Q Technology Conference in San Francisco. Hit by a steep drop-off in customer orders, declining revenue and layoffs, the chipmaker still sees a light at the end of the tunnel.
"We're experiencing an unprecedented drop-off and our near-term outlook is still very unclear," Engibous said to a roomful of fund managers. "But these down times will end, and when they end, we will be stronger on the other side."
Chips used in the next generation of cell phones and for high-speed, or broadband, Internet modems, will lead Dallas-based Texas Instruments out of its doldrums, Engibous said. TI has invested heavily in developing the chips that will help power cell phones and other mobile Internet devices, especially those that combine voice and data."Wireless data will drive future handset growth," he said. At the same time, Engibous said TI's broadband business "is the bright spot in what has been a tough year," with revenue and market share continuing to grow. Two weeks ago, TI topped reduced Wall Street estimates for the first quarter, earning $317 million, or 18 cents a share, excluding charges. But revenue sank to $2.53 billion, an 8% decrease from the $2.76 billion in the year-ago quarter and down 17% sequentially. Looking ahead, TI said it expects revenue to decline about 20% sequentially in the second quarter and that it would cut 2,500 workers, or 6%, of its workforce. Speaking this morning, Engibous said nothing to change the clouded near-term outlook.
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