Tuesday, July 22, 2003
Texas Instruments Inc. expected the worst fallout from the SARS outbreak in China earlier this year but a strong turnout by consumers as the second quarter wrapped up lifted wireless chip sales above expectations at the company.
In a surprising turnaround, TI said its second quarter wireless IC sales declined 5% on a sequential basis but rose 16% from the year-ago quarter, helping the company to slightly exceed analysts' revenue and earnings estimates.
Dallas-based TI recorded net income of $121 million, or 7 cents a share, for the three months ended June 30, up 27% from $95 million, or 5 cents a share, in the second quarter of 2002. Revenue rose 8%, to $2.3 billion, in line with analysts' estimate and up from $2.2 billion in the year-ago quarter.
In a June earnings update, TI warned its sales would lag expectations due to the negative impact of the SARS outbreak in China. The company and a handful of other chip manufacturers and OEMs said concerns about the SARS virus kept many consumers, especially in China, away from electronics stores.
"Wireless revenue was higher than the company expected in its June 10 financial update due to strong customer demand during the last few days of the quarter," TI said, in a statement.
TI also benefited from strong growth across most of its product sectors, contributing to a 9% upswing in semiconductor sales from the second quarter of 2002, according to Tom Engibous, TI's chairman, president and chief executive, in the statement.
"We believe TI continues to gain share in critical markets, including broadband communications, digital signal processing and analog," Engibous said.
TI forecasts revenue in the third quarter would be in the range of $2.3 billion to $2.5 billion with semiconductor sales expected to be between $1.9 billion and $2.1 billion.
The company said sales in its sensors and control division would be in the range of $230 million and $250 million.
TI's gross profit margin fell in the June quarter to 38%, from 40% in the comparable 2002 quarter, a decline the company attributed to restructuring charges.
The company said its 2003 R&D spending would be about $1.7 billion while capital expenditures would be approximately $800 million.
By: DocMemory
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