Texas Instruments Earnings Soar on Tablet Strength
Revenues came in it at $3.5 billion, slightly lower than estimates of $3.52 billion. The per-share increase was in line with forecasts. Shares moved lower in after-market trading.
The Dallas, Tex.-based company sells microprocessors used in a variety of devices, including home security systems, computers, factory-testing equipment, medical equipment and automobiles.
"Orders were strong in the quarter, backlog increased and we expect to grow revenue again in the third quarter," said Rich Templeton, company chairman, president and chief executive officer.
Many analysts believe tablets will cannibalize netbooks and low end notebooks. A tablet is a PC equipped with a stylus or a touchscreen, including eBook readers and PDAs.
"We believe tablets may pressure the outlook for the consumer computing market (65% of the market) and specifically netbooks with some modest tempering of lower end notebooks," Barclays Capital analyst Tim Luke wrote in a recent report, where he also trimmed estimates for both Intel and AMD, as possible companies that may face pressure from growth in tablets.
Texas Instruments raised its forecast for the quarter in June, saying demand is reviving particularly in the industrial sector. As part of its earnings announcement Monday, the company forecasted revenues of $3.55 billion to $3.85 billion, and earnings per share from 64 cents to 74 cents.
Texas Instruments' stock finished up 3% or 78 cents a share, to close at $25.55. It is nearing its 52-week high of $27.44.