Texas Instruments Boosts 4th-Qtr Earnings Forecast (Update3)
Dallas, Dec. 2 (Bloomberg) -- Texas Instruments Inc. said fourth-quarter earnings and revenue will top forecasts, as rising sales of chips for wireless devices signal a possible recovery for semiconductor companies.
Net income will be about 1 cent a share, up from a forecast of break-even, and sales will drop 7 percent from the third quarter, instead of the 10 percent decline predicted in October, the company said in a statement.
Shares of Texas Instruments and other chipmakers have climbed in the last month as investors bet that growing chip sales indicate a rise in technology spending. The Semiconductor Industry Association said Friday that chip sales in October rose 20 percent from the same period a year ago, largely on the strength of sales of semiconductors for wireless phones.
``Stocks have run up on the thinking that good news is right in front of us,'' said Eric Ross, an analyst with Investec Inc. who rates Texas Instruments shares ``hold'' and said he doesn't own them.
Profit Forecast
The shares of Dallas-based Texas Instruments, which powered half the mobile phones sold last year, rose $1.03 to $20.80 at 7:28 p.m. New York time in extended trading on the New York Stock Exchange. They fell 24 cents in regular trading and have jumped 21 percent since Nov. 11.
Profit excluding some costs will be about 3 cents a share, Texas Instruments said. On that basis, which doesn't conform to generally accepted accounting principles, the company was expected to earn 2 cents, the average estimate of a Thomson First Call survey.
The company said in October it expected fourth-quarter sales to drop 10 percent from the third quarter to about $2.02 billion. Texas Instruments reported a loss of $116 million, or 7 cents a share, for last year's fourth quarter on sales of $1.79 billion.
Sales of handsets will rise to 420 million units in 2003 and 501 million units in 2004, Merrill Lynch International analyst Andrew Griffin said today in a note to clients.
``The business is going to improve, but it's going to be tough to grow at the rates we're used to in the early stages of an upturn,'' Ross said. He expects handset sales to grow more in the second half of 2003 than in the first half.
Chip Shares Jump
Lehman Brothers Inc. analyst Dan Niles today raised his ratings of Intel Corp. and Advanced Micro Devices Inc., noting that sales should improve as consumers replace personal computers and buy new software and wireless phones, which use memory chips made by those companies.
The Philadelphia Semiconductor Index, which includes Texas Instruments, Intel, Advanced Micro and 14 other chip-related stocks, has risen 33 percent since Nov. 11 and rose 1.71 points to 375.24 at 5:18 p.m.
Shares of Intel, the world's biggest chipmaker, rose 20 cents to $21.25 at 6:29 p.m. in Nasdaq Stock Market trading after the Texas Instruments announcement. They rose 17 cents in regular trading and have jumped 21 percent since Nov. 11. Advanced Micro shares rose 25 cents to $9.18 at 7:53 p.m. after falling 7 cents in regular trading.
Dallas, Dec. 2 (Bloomberg) -- Texas Instruments Inc. said fourth-quarter earnings and revenue will top forecasts, as rising sales of chips for wireless devices signal a possible recovery for semiconductor companies.
Net income will be about 1 cent a share, up from a forecast of break-even, and sales will drop 7 percent from the third quarter, instead of the 10 percent decline predicted in October, the company said in a statement.
Shares of Texas Instruments and other chipmakers have climbed in the last month as investors bet that growing chip sales indicate a rise in technology spending. The Semiconductor Industry Association said Friday that chip sales in October rose 20 percent from the same period a year ago, largely on the strength of sales of semiconductors for wireless phones.
``Stocks have run up on the thinking that good news is right in front of us,'' said Eric Ross, an analyst with Investec Inc. who rates Texas Instruments shares ``hold'' and said he doesn't own them.
Profit Forecast
The shares of Dallas-based Texas Instruments, which powered half the mobile phones sold last year, rose $1.03 to $20.80 at 7:28 p.m. New York time in extended trading on the New York Stock Exchange. They fell 24 cents in regular trading and have jumped 21 percent since Nov. 11.
Profit excluding some costs will be about 3 cents a share, Texas Instruments said. On that basis, which doesn't conform to generally accepted accounting principles, the company was expected to earn 2 cents, the average estimate of a Thomson First Call survey.
The company said in October it expected fourth-quarter sales to drop 10 percent from the third quarter to about $2.02 billion. Texas Instruments reported a loss of $116 million, or 7 cents a share, for last year's fourth quarter on sales of $1.79 billion.
Sales of handsets will rise to 420 million units in 2003 and 501 million units in 2004, Merrill Lynch International analyst Andrew Griffin said today in a note to clients.
``The business is going to improve, but it's going to be tough to grow at the rates we're used to in the early stages of an upturn,'' Ross said. He expects handset sales to grow more in the second half of 2003 than in the first half.
Chip Shares Jump
Lehman Brothers Inc. analyst Dan Niles today raised his ratings of Intel Corp. and Advanced Micro Devices Inc., noting that sales should improve as consumers replace personal computers and buy new software and wireless phones, which use memory chips made by those companies.
The Philadelphia Semiconductor Index, which includes Texas Instruments, Intel, Advanced Micro and 14 other chip-related stocks, has risen 33 percent since Nov. 11 and rose 1.71 points to 375.24 at 5:18 p.m.
Shares of Intel, the world's biggest chipmaker, rose 20 cents to $21.25 at 6:29 p.m. in Nasdaq Stock Market trading after the Texas Instruments announcement. They rose 17 cents in regular trading and have jumped 21 percent since Nov. 11. Advanced Micro shares rose 25 cents to $9.18 at 7:53 p.m. after falling 7 cents in regular trading.
