Texas Instruments Forecasts Miss Analysts’ Estimates

Texas Instruments Inc. (TXN), the largest maker of analog chips, predicted second-quarter profit and sales that may fall short of analysts’ most bullish estimates as some consumer-electronics makers hold off on component purchases.

Profit in the current period will be 39 cents to 43 cents a share on revenue of $2.99 billion to $3.11 billion, the Dallas-based company said in a statement yesterday. On average, analysts had estimated a profit of 41 cents and sales of $3.06 billion, according to data compiled b Bloomberg. The company said in April profit would be 37 cents to 45 cents a share on revenue of $2.93 billion to $3.17 billion.

While orders for chips used in industrial machinery and cars have continued to grow, demand is weak for semiconductors used in personal computers and consumer devices such as game consoles, Vice President Ron Slaymaker said on a conference call. Texas Instruments’ chips go into everything from kidney-dialysis machines to DVD players, making its earnings an indicator of demand across the electronics industry.

“PCs will remain a trouble spot for the company,” said Bill Kreher, an analyst at Edward Jones & Co. in Des Peres, Missouri. “There may have been an expectation for a reset on guidance and they just narrowed it.”

Photographer: Daniel Acker/Bloomberg

Texas Instruments Inc.'s chips go into everything from kidney-dialysis machines to DVD players, making its earnings an indicator of demand across the electronics industry. Close

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Photographer: Daniel Acker/Bloomberg

Texas Instruments Inc.'s chips go into everything from kidney-dialysis machines to DVD players, making its earnings an indicator of demand across the electronics industry.

Texas Instruments shares slipped 3.7 percent to $35.26 at the close in New York. The stock has gained 14 percent this year, compared with a 21 percent gain in the Philadelphia Semiconductor Index.

Under Chief Executive Officer Richard Templeton, Texas Instruments is exiting the market for digital chips used in smartphones and tablets. Cutting that division is causing total sales to contract from a year earlier.

The company is focusing on the market for analog chips, the semiconductors that convert what happens in the real world -- such as touch, sound and pressure -- into electronic signals.

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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