For those who think TI is on the list of 174+...
TI beats Q4 estimates, but orders slip
Dylan McGrath
1/24/2011 5:20 PM EST
SAN FRANCISCO—Texas Instruments Inc. Monday (Jan. 24) reported sales and profit for the fourth quarter of 2010 that exceeded consensus analysts' expectations, but the company said orders declined on both a sequential and year-to-year basis.
TI (Dallas) reported fourth quarter sales of $3.53 billion, down 6 percent sequentially but up 17 percent year-to-year. The company posted a net income for the quarter of $942 million, or 78 cents per share, an increase of 10 percent sequentially and 44 percent year-to-year.
TI said is fourth quarter earnings were boosted by 14 cents per share from the combination of the gain on the sale last year of its cable modem product line to Intel Corp. and a tax benefit that was primarily associated with the reinstatement of the U.S. federal R&D tax credit.
TI's fourth quarter numbers exceeded consensus analysts' expectations, which called for revenue of $3.5 billion and earnings of 60 cents per share, according to Yahoo Finance.
For the full year 2010, TI report sales of $14 billion, up 34 percent from 2009. The company posted a net income for the year of $3.2 billion, up 120 percent from 2009.
"Strong revenue growth of 34 percent last year was led by our core businesses of Analog, Embedded Processing and the part of our Wireless segment that is focused on smartphones and tablets," said Rich Templeton, TI's chairman, president and CEO, in a statement. "Each of these core businesses grew more than 40 percent and gained significant market share."
TI said the company booked $3.13 billion worth of orders during the fourth quarter, down 4 percent sequentially and down 9 percent year-to-year. Inventory grew to $1.52 billion by the end of the fourth quarter, up $96 million sequentially and up $318 million year-to-year.
Despite the decrease in orders, TI believes its prediction of a short and shallow correction is holding true, said Ron Slaymaker, TI's vice president and head of investor relations. "We believe the slowdown that started in the summer of 2010 is mostly complete," Slaymaker said.
Lead times for TI devices, which were running excessively long a year ago, have "now completed an orderly reduction and are back to normal," Slaymaker said.
Factory utilization declined in the fourth quarter due to the ramping of three new factories and lower capacity utilization in existing factories as markets slowed, said Kevin March, TI's chief financial officer.
Fourth quarter apital expenditures were $301 million in the fourth quarter, down from $396 million in the previous quarters and down from $436 million in the year-ago quarter, TI said. TI said it expects to invest $900 million in capital expenditures in 2011.
For the first quarter of this year, TI said it expects to report sales of between $3.27 billion and $3.55 billion. The guidance is consistent with consensus analysts' expectations, which currently call for TI to report sales of $3.32 billion, according to Yahoo Finance. The company expects to report earnings of 54 to 62 cents per share, TI said.
Last August, Intel announced it had agreed to acquire TI's cable modem product line. Financial terms of the deal were not disclosed.
