(Adds comment from analyst, one-time gain and charges)
By Noel Randewich
SAN FRANCISCO, July 22 Texas Instruments Inc
gave a third-quarter revenue forecast that was stronger
than some analysts expected and said customers seem more
confident about placing orders for chips.
Orders picked up in the first half of 2013 and Chief
Financial Officer Kevin March told Reuters on Monday that
business continues to improve, following weak demand last year
due to concerns about the global economy.
Texas Instruments' book to bill ratio, a measure of orders
filled, was 1.03 in the second quarter, unchanged from the prior
quarter. A ratio of over 1 suggests a chipmaker received more
orders than it could fill during a given period.
TI's customers are starting to give the No. 3 U.S. chipmaker
a better idea about their future needs.
"Up until this past quarter with these orders it's been for
pretty short-term deliveries, so that's a bit of a change in
tone and perhaps confidence on the part of our customers," March
Texas Instruments is winding down its wireless chip business
as competition from Qualcomm Inc and other rivals has
hurt profitability. TI is focusing on analog and embedded chips
used in products ranging from cars to televisions and which
account for the bulk of the company's revenue.
Analog and embedded account for 78 percent of TI's revenue,
up 6 percentage points from a year ago, the company said.
"The quality of their earnings is moving much more
significantly toward their core business and away from
lower-gross margin wireless," said FBR Capital Markets analyst
Texas Instruments said its second-quarter results included a
gain from the sale of some wireless connectivity technology as
well as higher-than-expected charges from the company's
TI posted second-quarter revenue of $3.047 billion, down 9
percent from the year-ago period.
Net income jumped to $660 million, or 58 cents a share, from
$446 million, or 38 cents a share, in the 2012 second quarter.
In the third quarter, revenue will range from $3.09 billion
to $3.35 billion, the company estimated.
Analysts on average had expected revenue of $3.059 billion
for the second quarter and $3.199 billion for the third quarter,
which ends in September, according to Thomson Reuters I/B/E/S.
Texas Instruments estimated earnings per share of 49 to 57
cents in the third quarter.
Shares of Texas Instruments rose 1.95 percent in extended
trade after closing up 0.43 percent at $37.42 on Nasdaq.
(Reporting by Noel Randewich; Editing by Richard Chang)