TI narrows forecast, notes weakness in wireless handsets
By Suzanne Deffree, Managing Editor, News -- 6/10/2008
Texas Instruments Inc has narrowed its Q2 outlook, now forecasting total revenue between $3.33 billion and $3.46 billion, compared with the prior range of $3.24 billion to $3.5 billion.
In doing so, TI noted weakness in wireless handset revenue, with Investor Relations VP Ron Slaymaker stating on the company’s Q2 update conference call that wireless handset revenue “continues to be unseasonably weak and we would expect that it's probably going to be down a little bit from the first quarter level.”
Slaymaker continue to point to strength in analog, saying he expects the TI segment to record revenue growth quarter over quarter, as well as year over year.
“While analog appears slightly better, and embedded processing remains solid, wireless remains weak due to shift at EMP [Ericsson Mobile Platforms] and weakness in low and mid tier are offsetting slightly improved trends in 3G after weak Q1,” Lehman Brothers Analyst Tim Luke said in a research note this morning. In 2007, Motorola expanded its relationship with TI to include 3G, WiMax, and OMAP technologies. Just weeks before that, TI’s 3G partnership with EMP shrunk in size when EMP announced a 3G agreement with STMicroelectronics.
Broken out, TI said it now expects Q2 semiconductor revenue between $3.17 billion and $3.28 billion, compared with the prior range of $3.08 billion to $3.32 billion; and
Q2 education technology revenue between $160 million and $180 million, unchanged from the prior range.
TI also narrowed Q2 EPS expectations to between $0.43 and $0.47, compared with the previous range of $0.42 to $0.48.
TI’s stock, TXN, closed this afternoon at $30.42, below its Monday close of $31.33.*
TI’s Q2 ends on June 30.
*Editor's note: This story was updated to reflect TI's closing price on June 10, 2008.
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