(Adds comment from analyst)
By Noel Randewich
SAN FRANCISCO, July 21 Texas Instruments Inc
said it expects higher third-quarter revenue following
recently improved demand for chips used in cars, industrial
equipment and communications gear.
Chief Financial Officer Kevin March said the company's
customers appeared to be holding lean inventories of chips,
which should help maintain demand.
"Things look to be OK, markets seem to be OK," March said in
an interview. "We don't see signs of any inventory that
customers are holding beyond what they need."
Since 2012, Texas Instruments has been winding down its
wireless business, which faced stiff competition from Qualcomm
Inc, to focus on more profitable embedded and analog
That strategy, along with buying manufacturing on the cheap
following the global financial crisis, is paying off, Ascendiant
Capital Markets analyst Cody Acree said, pointing to the
chipmaker's record 57 percent gross margin in the June quarter.
"Analog and embedded are really stable, predicable segments.
They're global economic proxies, so you're not worried about the
next iPhone or Samsung Galaxy," Acree said.
TI said on Monday its second-quarter revenue was $3.29
billion, up 8 percent from the year-ago period. The Dallas,
Texas-based company forecast third-quarter revenue of $3.31
billion to $3.59 billion. The mid-point of TI's revenue guidance
is about $3.45 billion.
Analysts on average had expected revenue of $3.27 billion
for the second quarter and $3.44 billion for the third quarter,
according to Thomson Reuters I/B/E/S.
Second-quarter net income rose 3 percent to $683 million. It
earned 62 cents per share, versus 59 cents expected by analysts.
The chipmaker said its third-quarter earnings per share
would range from 66 cents to 76 cents.
Shares of TI slipped 0.55 percent in extended trade after
closing up 0.72 percent at $49.17 on Nasdaq.
(Reporting by Noel Randewich; Editing by Richard Chang)