Texas Instruments forecasts revenue below estimates
NEW YORK (Reuters) - Texas Instruments Inc's quarterly revenue fell as demand for its chips slipped on economic concerns, and the company forecast more weakness this quarter.
The U.S. chipmaker has been under pressure from a weak global economy and a wavering personal computer industry and is wrestling to fill manufacturing capacity it bought for pennies on the dollar following the global credit crisis.
"Across the board we're seeing customers being extremely cautious, very careful about the level of inventory that they hold so giving us very low levels of visibility as to what they'll want to order for the quarter," Texas Instruments Chief Financial Officer Kevin March said in an interview.
The chipmaker's inability to fully utilize its fabrication plants has investors worried about its profitability.
"With the macroeconomic slowdown we're experiencing, and TI's excess capacity - they're only using about 75 percent of their capacity right now - they're going to be under some longer-term pressure to try to fill those fabs," said JoAnne Feeney, an analyst at Longbow Research.
The maker of chips used in products ranging from consumer electronics to industrial equipment posted a profit of $784 million, or 67 cents per share, up from $601 million, or 51 cents per share, in the year-ago quarter.
Revenue declined to $3.39 billion from $3.47 billion in the year-ago quarter.
TI forecast fourth-quarter earnings of 23 to 31 cents per share on revenue of $2.83 billion to $3.07 billion.
Analysts on average had expected TI's revenue in the current quarter to be $3.24 billion, according to Thomson Reuters I/B/E/S.
"It's definitely light. ... But I don't know how surprising that is given what we've seen in semiconductors and tech recently," said Stacy Rasgon, an analyst at Bernstein Research.
TI's shares were about flat in extended trade after closing off 2 cents at $27.79 on Nasdaq.
(Reporting by Sinead Carew; Editing by Richard Chang)
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