Texas Instruments Inc. surprised investors Wednesday with upbeat third-quarter results and said its fourth quarter will be better than analysts had forecast.

Dallas-based TI reported a 3 percent decline in third-quarter profit and said sales came in stronger than expected, even though global demand for its semiconductors remained weak.

Results were reported after the market closed. TI stock fell by 53 cents a share to $51.90 on Wednesday. But the stock was up 10 percent in after-hours trading.

While the global economy is slowing, TI has seen gains in sales of chips to both automakers and personal electronics makers, largely producers of smartphones, said TI chief financial officer Kevin March.

Revenue declined in Asia, Europe and the U.S., but it was up in Japan mostly from the auto and industrial customers, he said.

TI is benefiting not only from the growth in U.S. car sales that has continued since the recession, but also because cars are getting smarter, March said. The company’s chips are in automobile navigation systems, and brake safety and lane changing systems.

Years ago, TI exited the telecom chip business and predicted it was making chips that were cheap commodities. Instead, it shifted to more complex semiconductors that help make smartphones run. TI chips, for example, are in touch display screens and regulate battery charges that make features of the device run smoothly.

The company said in July that it’s selling its 84-acre Spring Creek campus in Plano. The property is under contract with a developer, March said, but no firm deal has been reached and others are looking at it.

The chipmaker reported a third-quarter profit of $798 million, or 76 cents a share, vs. a profit of $826 million, or 76 cents a share, a year ago. Stock repurchases kept earnings per share flat.

TI reported third-quarter sales of $3.43 billion, down 2 percent from a year ago.

Analysts surveyed by Thomson Reuters expected a profit of 68 cents a share and total sales of $3.28 billion.

TI said its fourth-quarter profit outlook for earnings per share is in the range of 64 cents to 74 cents and above analysts’ forecast of 62 cents. The company also increased its dividend.

By: DocMemory
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