Texas Instruments Inc., whose chips power half the mobile phones sold last year, said third-quarter
earnings more than doubled and profit this quarter will exceed
forecasts. The company’s shares rose as much as 8.3 percent.
Net income increased to $447 million, or 25 cents a share,
from $188 million, or 11 cents, a year earlier. Sales rose 13
percent to $2.53 billion from $2.25 billion, the Dallas-based
company said in a statement. Texas Instruments has a facility in Attleboro.
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Profit this period will beat analysts’ estimates, and sales
will rise as much as 26 percent, the company said. Chief
Executive Tom Engibous has boosted sales of semiconductors that
run mobile phones with cameras and MP3 audio players. Texas
Instruments gets about a quarter of its annual sales from chips
used in phones made by clients including Nokia Oyj.
“We were all expecting good news, but they just knocked the
cover off the ball,” said Greg Barlage, a chip analyst at Stein Roe Investment Counsel, which manages $7.5 billion and owns Texas
Instruments shares. “The boost was clearly wireless.”
Sales this quarter will be $2.49 billion to $2.7 billion,
with profit of 14 cents to 19 cents a share, the company said.
Analysts on average expected profit of 11 cents on sales of $2.49
billion, according to Thomson Financial. The net loss was 34
cents on sales of $2.15 billion a year earlier.
A gain from selling shares of Micron Technology Inc. boosted
third-quarter earnings. Excluding the gain, profit would have
been 12 cents a share, Thomson Financial said. On that basis,
analysts expected an average of 9 cents, according to Thomson.
Texas Instruments stock has increased 71 percent this year.
Texas Instruments has cut costs by firing workers and hiring
companies such as Taiwan Semiconductor Manufacturing Co. to make
some of its most complicated chips. In factories it owns, Texas
Instruments is building chips on larger, 300-millimeter wafers.
The bigger wafers cut production costs by about a third, the
company has said.
Gross margin, the percentage of sales left after paying
production costs, expanded to 41 percent in the third quarter
from 37 percent a year earlier.
Bloomberg News
