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TI: 2012 is 'a good year for growth'

Posted: 25 Apr 2012 ?? ?Print Version ?Bookmark and Share

Keywords:sales? inventory? wireless chip?

Texas Instruments Inc. has released the details of its Q1 sales that beat analysts' expectations as the company's top executive said the company is expecting the year to be 'a good year for growth. In fact, the chip company's Q1 sales came in above consensus analysts' expectations and above its own revised sales target.

TI reported Q1 sales of $3.12 billion, down nine percent QoQ and down eight percent YoY. The company reported a net income for the quarter of $265 million, or 22 cents per share, down 11 percent QoQ and down 60 percent YoY.

"As we expected, our business cycle bottomed in the first quarter, and early signs of growth began to emerge," noted Rich Templeton, TI's chair and CEO. "Orders were up 13 percent, and backlog is growing again. Particularly encouraging is the breadth of increased orders across geographical regions and markets, including the industrial sector."

TI reported orders of $3.24 billion in Q1, up 13 percent QoQ and nine percent YoY. The company said its inventory rose to $1.85 billion in the quarter, up $56 million compared to the prior quarter and up $175 million compared to 4Q11.

TI said its earnings per share for Q1 included 10 cents per share for charges associated with the company's acquisition of National Semiconductor Corp. and restructuring. Total acquisition-related charges associated with the acquisition were $174 million in Q1, including $21 million in cost of revenue associated with the contract termination of a distributor.

Templeton said TI continues to make progress with the former National Semiconductor, now known as the TI's Silicon Valley Analog division. Sales of embedded processing products were up seven percent in Q1 compared to 4Q11, Templeton added.

TI's sales of wireless chips declined 48 percent sequentially in Q1 as TI entered the final phase of its exit from baseband products, Templeton said. Baseband chips made up less than three percent of TI's total sales in Q1, Templeton continued.

For Q2, TI said it expects sales to grow to between $3.22 billion and $3.48 billion, a sequential increase of 3-12 percent. TI's Q2's results will be negatively affected by about $100 million in charges related to the National Semiconductor and about $10 million of restructuring charges, the company indicated.

"We're poised for growth and share gains as markets rebound," Templeton said.

TI said it expects to spend about $2 billion on R&D and about $700 million in capital expenditures this year. Capital expenditures for Q1 totaled $103 million, mostly for test and assembly equipment and wafer manufacturing equipment, TI said.

- Dylan McGrath
??EE Times

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