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'Unseasonably Weak': Texas Instruments Takes Bite Out of Mobile Chips
Posted Jun 10, 2008 03:51pm EDT by Aaron Task in Investing, Semiconductors, Commodities
Texas Instruments tightened its second-quarter earnings forecast to 43 to 47 cents per share, the midpoint of which is a penny below consensus estimates. TI forecast revenue of $3.33 billion to $3.46 billion for the quarter vs. analysts' consensus of $3.38 billion.
In April, the company had forecast EPS of 42 to 48 cents and revenue of $3.24 billion to $3.5 billion.
"There are a couple of areas where we are seeing weakness one of which is wireless handset revenue, which continues to be unseasonably weak," Ron Slaymaker, TI's manager of investor relations said on the firm's conference call.
TI shares were recently down 2.4% in Big Board trading, while rivals such as RF Micro Devices, Broadcom, Marvel, Skyworks Solutions and On Semiconductor were down heavily in active trading on Nasdaq. Broadcom was also hit by some company-specific concerns from Pacific Crest chip analyst Ruben Roy.
Meanwhile, Apple did rebound from Monday's slide, recently up 2.5% to $186.15 as the post-op on the 3G's unveiling continues.
Cell phone and related stocks were among the few big movers Tuesday, keeping the Nasdaq in the red on a day where the major averages are only marginally changed. Graphics chipmaker Nvidia was also one of the most actively traded stocks Tuesday, falling over 6% after a downgrade from FTN Midwest.
While the stock market was relatively quiet, there was drama in the energy markets, where oil prices gave up early gains to close down 2.2% at $131.40 per barrel after Saudi Arabia called for summit to discuss the "unjustifiable rise in oil prices."
The rising dollar also hit oil, as well as gold. Currency traders reacted strongly to the hawkish rhetoric from Fed Chairman Ben Bernanke, who seems to be working in coordination with Treasury Secretary Hank Paulson and President Bush to shore up the battered greenback.
Not coincidentally, the "strong dollar" talk comes during President Bush's European visit and as the U.S. trade deficit rose a higher-than-expected 7.8% in April, largely because of higher energy prices.
4 Comments
nanette - Tuesday June 10, 2008 06:45PM EDT
the saudi production raise is not nearly enugh to impact oil prices
José - Wednesday June 11, 2008 05:07AM EDT
By the end of December 2007, I have sent this message to Apple: I think that Apple has the right technology to revolutionize the computer industry, in a way never seen before. I have an idea for that to happen; there it is: let Apple create a laptop computer just the size e shape of the current Macbook pro, but with some significant differences regarding the computer body, I mean, the body where the keyboard sits. Let´s make that body just like a giant iPhone where you can produce any type of keyboard. Let´s make the system to move files and folder icons from the screen to that surface, and let´s leave the screen just for visual work area. Let´s move the computer speakers to both sides of the screen, and let´s put two microphones and two sight cameras, one on each side. Man, Apple can do this!...and much more... ----------------------------- Of course, Apple never gave an answer to my message... ----------------------------- Those who watched the last Steev Jobs keynote presentation, can now understand what I said at that time. At some point, during the sample programming presentation, my idea started taking shape by the hand of Mark Terry. Take a look at that! in all this, that may be the most important development!... ---------------------------- After I sent my message to Apple, I stated my idea as comments to some articles at Yahoo Finance forum. Unhappilly, though I downloaded the SDK, I still didn´t get the money needed to install Leopard, the OS X you need to work with it... What can I say, most of the times, long sighted ideas come from no money places...
Honesty in Action - Wednesday June 11, 2008 11:38AM EDT
Texas Instruments needs to close another US facility this year to keep its costs down. Hopefully they will soon announce the closing of an older fab.
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- Tuesday June 10, 2008 04:27PM EDT
Consumers will not drive less at these prices. They will buy a fuel efficient car and keep their gas guzzler in the driveway. Life goes on.