Texas Instruments Inc. (NASDAQ:TXN) gave weak second-quarter guidance and said sales rose a disappointing 6% in the quarter ended in March, hurt by lower demand for personal electronics and the strong dollar.
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Shares, which were up 26% over the past 12 months through Wednesday's close, fell 7.5% in aftermarket trading.
Demand was particularly tepid in the last month of the quarter in the personal electronics segment, particularly in PCs, the company said. It also was lackluster in the communications equipment market, which includes wireless infrastructure equipment.
For the current quarter, the Dallas-based company said it expects to earn 60 cents to 70 cents a share on revenue of $3.12 billion to $3.38 billion. The Wall Street estimate was for 73 cents a share on $3.43 billion in revenue, according to analysts surveyed by Thomson Reuters.
Founded in 1930 as Geophysical Service Inc., Texas Instruments initially focused on reflection seismography in search for oil. TI, which now makes chips used in everything from cellphones to industrial equipment, has been moving away from digital chips to focus on analog chips, which often command lower prices but can be produced with older equipment at a high profit.
In the latest period, sales in the analog segment, which account for the largest share of its revenue, rose 11% to $2.04 billion, while embedded processing revenue, which includes processors and microcontrollers, edged up 2% to $672 million.
Overall, TI reported a profit of $656 million, or 61 cents a share, up from $487 million, or 44 cents a share, a year earlier.
Revenue rose 6% to $3.15 billion. Analysts, on average, had projected $3.2 billion, according to Thomson Reuters.
The company had expected earnings of 57 cents to 67 cents a share on revenue of $3.07 billion to $3.33 billion.
(By Angela Chen)