Buoyed by strong sales of automotive chips and improved sales of devices for communications and industrial equipment, Texas Instruments Inc. Wednesday (April 27) reported higher than expected first quarter sales and profit and delivered a forecast for the second quarter that was within range of Wall Street’s estimates.

TI (Dallas) reported first quarter sales of just over $3 billion, down 5% compared to the first quarter of 2015. The company reported a net income of $668 million for the quarter, up 2% compared with the year-ago period.

TI’s sales and pro forma earnings for the first quarter came in slightly better than average Wall Street analyst estimates.

Sales of analog and embedded processing chips made up 87% of TI’s total first quarter revenue, the company said. Embedded processing revenue was up 8% compared with the first quarter of 2015, while analog sales declined by 8% compared to the same period, the company said.

TI said strong demand for its automotive semiconductors in the first quarter was driven by infotainment and hybrid electric vehicle and powertrain systems.

Dave Pahl, vice president of investor relations, noted that market analysts estimate that there is probably around $350 in semiconductor content, on average, in a new car. “That's a number that's been growing very nicely,” Pahl said in a conference call with analysts following TI’s first quarter report.

”The automotive business that we're building continues to be very, very broad-based,” said Pahl, adding that it includes both analog products as well as embedded products. “Inside of embedded we've got both processors and microcontrollers, as well as even some connectivity designs inside of that business,” he said.

Gross margin for the first quarter came in at 60.6%, a new company record, TI said.

For the current quarter, which closes in June, TI said it excepts sales to be between $3.07 billion and $3.33 billion. Consensus analysts’ expectations had called for the company to report second quarter sales of about $3.18 billion.

By: DocMemory
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