By Noel Randewich
SAN FRANCISCO Oct 21 Texas Instruments Inc
forecast unexpectedly low fourth-quarter revenue,
underscoring concerns about spotty demand for chips for cars,
appliances, computers and industrial products and sending its
Demand for chips used in cars and communications
infrastructure had improved in the third quarter, helping make
up for a drop in revenue as TI wound down its unprofitable
"It looks like those segments now are decelerating," said
Williams Financial analyst Cody Acree. "It's possible that the
pace set earlier this year has left customers with a bit more
inventory and that customers are being cautious managing their
inventories heading into the end of year."
TI Chief Financial Officer Kevin March said in an interview
on Monday that his expectations of a quarter-over-quarter
decline in revenue were based on normal holiday seasonality in
those segments. Analysts differ in what they consider to be
normal seasonal variations in demand.
"We don't see anything that suggests to us anything other
than a normal fourth quarter shaping up," he said. "The Street
had anticipated our normal seasonal calculator decline but I
don't think they had correctly anticipated the fourth quarter to
be seasonally down."
TI said on Monday revenue fell to $3.244 billion from $3.390
billion in the third quarter last year. In the fourth quarter,
revenue will range from $2.86 billion to $3.10 billion, the
Analysts on average had expected revenue of $3.226 billion
for the third quarter and $3.116 billion for the current, fourth
quarter, according to Thomson Reuters I/B/E/S.
In the third quarter, demand improved as expected from
automakers and industrial customers, as well as makers of game
consoles and handsets, March said.
The company posted third-quarter net income of $629 million,
or 56 cents a share, compared to $784 million, or 67 cents a
share, in the year-ago quarter.
It said fourth-quarter earnings per share would range from
42 cents to 50 cents.
Shares of Texas Instruments fell 3.44 percent in extended
trade after closing up 0.69 percent at $40.99 on Nasdaq.