Texas Instruments boosts 2Q profit 48 percent

Texas Instruments' 2Q profit rises 48 percent despite drop in revenue

Associated Press

DALLAS (AP) -- Texas Instruments Inc. said Monday that second-quarter profit rose 48 percent on cost-cutting and demand for computer chips from automakers and industrial companies.

The company said its order backlog increased, and it issued a third-quarter profit forecast that ranged higher than analysts expected.

The shares rose 16 cents in regular trading to close at $37.42, and were up another 74 cents to $38.16 during after-hours trading.

The Dallas-based semiconductor company said that second-quarter net income was $660 million, or 58 cents per share. Excluding one-time items such as transferring wireless-connectivity technology to a customer, the company would have earned 42 cents per share.

That was a penny better than analysts' forecast of adjusted profit.

A year ago net income was $446 million, or 38 cents per share.

Revenue fell nearly 9 percent to $3.05 billion, slightly less than the $3.06 billion that analysts estimated.

TI's revenue has been sliding as it shifts away from the wireless business — phone manufacturers are developing their own chips for smartphones and tablet computers — and focusing more on semiconductors for power management and processors used in industries such as automotive.

The company has cut jobs, and its cost of producing revenue dropped by 12 percent in the second quarter. TI also slashed research and development spending by 19 percent.

TI predicted that third-quarter earnings would be between 49 and 57 cents per share on revenue between $3.09 billion and $3.35 billion. Analysts surveyed by FactSet forecast 51 cents per share on revenue of $3.20 billion.

Chairman and CEO Rich Templeton said that sales to industrial and automotive markets contributed to growth in revenue from the previous quarter. He added that the backlog grew and increased certainty about performance in the second half of the year.

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