Texas Instruments has posted disappointing quarterly numbers as demand for its mobile-phone chips, as well as its other semiconductor products sagged.
The Dallas, Texas-based company, the world’s largest make of mobile-phone chips, in part pointed to an inventory glut in the market. However, the company’s single largest customer, Nokia, showed signs of a potential recovery in inventory levels in the quarter, according to TI. TI also said it saw greater growth for its basic mobile-phone chips in China, India and Brazil.
Profit for the second quarter fell to $614m, or 42 cents a share, from $2.39bn, or $1.50, a year ago. However, last year’s numbers included a hefty $1.65bn boost from the sale of its sensors and control business. Revenue for the recent quarter fell to $3.42bn from $3.7bn. The numbers met TI’s earlier forecast, which it revised in June. However, analysts, on average, had hoped for revenue of $3.45bn.
Second-quarter orders came in at $3.45bn, or $455m lower than this time last year due to lower demand for semiconductor products that overwhelmed the $50m increase TI saw for calculators.
Looking ahead to the current quarter, TI said it expects to earn between 46 cents to 52 cents a share on revenue ranging from $3.49bn to $3.79bn. This forecast does not include the proceeds of the forthcoming sale of its DSL unit, which Infineon Technologies in June agreed to buy. TI’s outlook was in line with Wall Street forecasts.
TI during the past year has strategically slimmed down its business focus, to focus on GSM mobile-phone chips.
Shares in the company dropped slightly more than 3% to $36.86 in after-hours trading yesterday on the New York Stock Exchange.