Texas Instruments ( TXN) beat targets and raised guidance after a strong first-quarter performance. The Dallas chip giant on Monday posted an adjusted profit, excluding a $105 million inventory restructuring charge, of $115 million, or 7 cents a share. Those numbers compare with pro forma earnings of 49 cents a share in the year-ago quarter. Analysts had been looking for a 3-cent loss, according to First Call. Sales for the March quarter were $2.09 billion, compared with $3.27 billion last year. Analysts were looking for revenue of $1.9 billion. "Demand for our products has begun to stabilize after sharp drops in the past two quarters. Many customers have increased orders for TI products as they have begun to slow down their inventory reductions," CEO Rich Templeton said in a press release Monday. He added, however, that the company had not yet seen signs of a broader economic recovery.
TI shares jumped 3%, or 48 cents, to $17.80 in after-hours trading Monday. Looking ahead, TI says it expects to post an adjusted profit of about 13 cents a share, excluding $100 million in charges on sales of $2.17 billion. That is well above analysts' forecasts calling for the company to post a 2-cent profit on $1.94 billion in sales in the current quarter ending in June. With a pile of unsold mobile phones in the market, phone makers like Nokia ( NOK) reduced production to try to clear the surplus. For suppliers like TI, this meant fewer chips sold and an inventory glut of its own. TI said it took a $115 million charge in the quarter to write down its excess chip supply.