By Sinead Carew
NEW YORK Dec 10 Texas Instruments Inc
on Monday slightly improved a profit target, excluding a massive
restructuring charge, as the company is cutting costs due to
While the company did not improve the mid-point of its
revenue target, a key measure of demand for its chips, its
non-GAAP earnings outlook was a penny better than expected.
Investors initially took the change as a positive sign, but
an after hours share gain soon disappeared after an executive
spoke to analysts on a conference call.
Investor relations executive Ron Slaymaker said that the
penny difference was due to general tightening down on expenses
where possible because of the weak economy.
"I can't see how you could read a recovery into what TI
said," Charter Equity Research analyst Ed Snyder said, noting
that TI gave no indication that demand was going to get better
or worse and that this would make its stock volatile.
Adds analyst comment, executive
"This isn't going to give comfort to either the bulls or the
bears because there's no clear indication of a sustained long
term trend up or down," he said.
Including a 21 cent per share restructuring charge, the chip
maker forecast current-quarter earnings per share in a range of
5 to 9 cents.
But excluding the restructuring charge, the new target
implies a midpoint of 28 cents per share on a non-GAAP basis,
compared with TI's previous midpoint of 27 cents per share.
The fourth-quarter charge relates to the company's November
announcement that it will cut 1,700 jobs as it moves out of the
market for application chips in cell phones.
TI forecast fourth-quarter revenue of $2.89 billion to $3.01
billion compared with its previous expectation for $2.83 billion
to $3.07 billion.
The latest guidance implies a midpoint of $2.95 billion and
compares with Wall Street expectations for $2.96 billion
according to Thomson Reuters I/B/E/S.
After rising as high as $30.25 in after hours trade, TI
shares settled back to their $29.82 Nasdaq close following the