Texas Instruments Inc. (TXN), the largest analog-chip maker, gave third-quarter sales and profit forecasts that were in line with estimates as demand for automotive and industrial parts helps counter a personal-computer slump.
Revenue will be $3.15 billion to $3.29 billion, the Dallas-based company said yesterday in a statement. On average, analysts had projected sales of $3.23 billion, according to data compiled by Bloomberg. Earnings will be 51 cents to 55 cents a share, compared with estimates for 53 cents. In July, the company predicted sales of $3.09 billion to $3.35 billion.
Texas Instruments’ chips are used in almost every type of electronic device that needs a semiconductor, making its earnings a proxy for demand across the industry. While revenue is still poised to drop from a year ago, the company said its automotive and industrial businesses are doing well, and growth is returning to the handset, game-console and notebook markets.
“We had expected that the first-half growth we had seen in the industrial and automotive markets would continue into the third quarter, and in fact it has,” Ron Slaymaker, vice president of investor relations, said on a conference call.
Texas Instruments shares rose 1.4 percent to $40.31 at yesterday’s close in New York. They slipped to $40.02 in extended trading after the midquarter update. The stock has gained 30 percent this year, compared with a 28 percent increase 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 has been limiting revenue since last year.
While the shift has eased the company’s dependence on the mobile-device market, Texas Instruments supplies cheaper components such as power-regulation chips and audio processors for phones. Its products are also used as power regulators in PCs.
To contact the editor responsible for this story: Pui-Wing Tam at firstname.lastname@example.org