TI Lowers 4Q EPS Guidance - Analyst Blog
December 11 2012 - 4:30AM
Zacks
Recently, Texas Instruments (TXN)
or "TI" narrowed its revenue and earnings expectations for the
fourth quarter of 2012.
The chipmaker now expects sales of
$2.89–$3.01 billion versus its previous guidance of $2.83–$3.07
billion. The earnings outlook has also been trimmed to 5–9 cents
from the previous guidance of 23–31 cents.
The current earnings guidance
includes 21 cents of charges associated with previously announced
restructuring in the company's Wireless segment.
Recently, TI announced its
restructuring program wherein the company plans to cut 1,700 jobs
worldwide in order to reduce operational costs, shut down its
wireless chip operations, and concentrate on embedded solutions
like automobiles, industrial and other non-consumer markets, which
have a longer life cycle. The company expects to incur total
charges of approximately $325 million in the fourth quarter.
It is encouraging that despite the
weak macro environment, the company has not lowered the midpoint of
the revenue guidance. With game consoles and e-books doing well for
TI, the company cited weakness in wireless infrastructure and
industrial markets.
In order to retain its position in
the world, it is imperative that TI continues to undertake various
initiatives and develop new products, keeping in mind the interest
of the organization in both the long and short run. We believe the
restructuring action will bring in stability and steady earnings
growth in the near future.
Texas Instruments is one of the
largest suppliers of analog and digital signal processing (DSP)
integrated circuits. In the third quarter, TI posted decent
numbers, with both revenue and earnings surpassing our
expectations. The company’s compelling product line-up, increasing
differentiation in its business, restructuring activities and
lower-cost 300mm capacity should drive earnings in the longer
term.
Currently, Texas Instruments has a
Zacks #3 Rank (Hold). We note that its rivals, Maxim
Integrated Products, Inc (MXIM), Analog Devices,
Inc (ADI), Broadcom Corp (BRCM), and
Intel Corp. (INTC) also carry a Zacks #3
Rank (Hold).
ANALOG DEVICES (ADI): Free Stock Analysis Report
BROADCOM CORP-A (BRCM): Free Stock Analysis Report
INTEL CORP (INTC): Free Stock Analysis Report
MAXIM INTG PDTS (MXIM): Free Stock Analysis Report
TEXAS INSTRS (TXN): Free Stock Analysis Report
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