stock rallies on release of positive expected earnings data
TXN's Q4 net income decreased from $756 million (54 cents per share) in their year-ago Q4 to $107 million (8 cents per share) in the current Q4. Revenue dropped from $3.56 billion to $2.49 billion.
TI revenues dropped 8% y-o-y and and net income dropped 26% y-o-y. TI attributed the weak quarter on the hurting economy and reduced capital spending by firms. To cut costs, TI will sell part of its wireless business. This restructuring effort is expected to save TI $200M per year.
TXN reported its outlook for the quarter and it was in line with analyst estimates. Shares rose 6% on this news because there was fear that the decreased handset market share from Nokia would lower the outlook.
TXN was downgraded from strong buy to outperform by Raymond James Equity Research. The reasoning behind the downgrade included smaller than expected handset market share from big customer Nokia, lower than expected seasonal demand, and a hurting macroeconomic environment. However, TXN is still rated at outperform as the analyst considered it be undervalued and had long term growth potential.
Worldwide semiconductor sales grew 7.6% in July 2008 compared to July 2007. This is for all semiconductor sales and not specifically TXN. The growth is attributable to strength in cellphone and PC sales in particular.
SIA Global reported that semiconductor unit sales are up 8% over a year ago, driven largely by a 12.9% increase in Asia-Pacific. June semiconductor sales were up .5% y-o-y, but were 12% y-o-y when memory chips are excluded.
TI shares fell 14% on Wednesday as profits dropped and earnings were worse than expected. TI cited low demand for cell phone chips as well as decreased orders from distributors in June.
Texas instruments reported earnings in line with analysts estimates, but forecasted lower than expected profits for Q2 due to lower expected demand in the weak economy. Analysts downgraded TXN off this information causing the stock to drop 6%.
Bank of America downgraded Texas Instrument's rating from "Buy" to "Neutral" due weak earnings expectations.
Texas Instruments announced a 10 percent increase in Q3 profit, but this was below analysts’ expectations. The company also lowered its Q4 guidance since Sony Ericsson reported a loss in revenue and market share. Also, Texas Instruments will not be the wireless baseband supplier for Nokia Corporation and thus, the company’s market share can decrease.
TI announced on May 9 that it anticipates gross margins reaching 55% in the next few years, up from its previous estimate of 50%. Shares reached a 52-week high of $36.83.
07 - 3TXN shares drop from from $32.59 to $31.22, or a little over 4%, as the company lowers its Q1 earnings forecast.