Texas Instruments Inc warns of weak demand
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Texas Instruments Inc on Tuesday posted quarterly revenue that was ahead of Wall Street expectations but the chip maker warned of uncertain demand and a widespread customer reluctance to order until the last minute due to macroeconomic worries.
TI, which makes chips for everything from industrial equipment to cars, said that while orders appeared to be following a normal pace for this time of year, customers were worried about increasing their inventory of chips.
Chief Financial Officer Kevin March told Reuters that quarterly revenue was at the high end of TI's expected range because customers had made some orders late in the quarter.
But he said that weakness in European economies and in China as well as uncertainty about government policies in the United States was making customers wary of ordering too many chips.
"You've got the lingering uncertainty in Europe. You've got the slowdown in China that seems to be reversing itself now and you've got the (U.S.) fiscal cliff taking up all the headlines," March told Reuters. "Combined, it's got everybody really conservative right now and not willing to go out on a limb."
On top of this, the company's previously announced wind down of its cellphone chip business will push revenue down much more than it otherwise would have fallen in the first quarter, March said.
TI said its fourth-quarter profit fell to $264 million or 23 cents per share compared with $298 million or 25 cents per share in the year-ago quarter. Revenue fell to $2.98 billion from $3.42 billion but was ahead of Wall Street expectations for $2.95 billion according to Thomson Reuters I/B/E/S.
For the first quarter the company warned that revenue could decline further as it forecast a range of $2.69 billion to $2.91 billion. This is expected to include a $135 million decline from the wireless business.
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