reported Monday its earnings rose 69% in the first quarter, exceeding Wall Street's expectations by 2 cents on the strength of semiconductor sales, which are expected to drive accelerating revenue growth in the second quarter.
The Dallas, Texas-based semiconductor maker also expects robust growth from its semiconductor business for the year, driven by strength in the wireless and broadband equipment markets that use Texas Instruments products. By the end of the fourth quarter, the company expects to reach pro forma operating margin of 25%.
For the year, research and development is expected to be $1.5 billion pro forma, with capital expenditure raised to $2.5 billion.
For the first quarter ended March 31, pro forma income rose to $470 million, or 55 cents a diluted share, from $278 million, or 34 cents a share a year earlier, surpassing the 53-cent consensus estimate of analysts polled by
First Call/Thomson Financial
The pro forma numbers exclude a charge of $29 million for the closing of a Kentucky manufacturing facility and the March acquisition of Denmark-based
, a developer of digital-audio amplifier technology. Also excluded is the $25 million amortization of goodwill and other acquisition-related intangibles.
The year-ago quarter excluded a $25 million charge for the consolidation of semiconductor manufacturing operations in Japan and the $10 million amortization of goodwill and other acquisition-related intangibles.
Including exceptional items, net income was $426 million, or 50 cents a diluted share, up from $255 million, or 31 cents a share, a year earlier.
Revenue rose 27% to $2.65 billion from $2.08 billion a year ago on the strength of semiconductor sales. Semiconductor revenues stood at $2.27 billion, up 30% from $1.74 billion a year earlier.
Orders in the first quarter totaled $2.88 billion, up 26% from $2.28 billion a year earlier.
"Internet and communications applications continued to be our largest growth drivers, reinforcing the importance of programmable digital signal processors and analog products to the Internet age," said Tom Engibous, chairman, president and chief executive of Texas Instruments, in a statement.
Shares of Texas Instruments rose 25 3/16, or 19%, to 156 15/16 in regular
New York Stock Exchange
trading before the results were released. In after-hours trading, the stock slipped 3, to 153 15/16.