'Unseasonably Weak': Texas Instruments Takes Bite Out of Mobile Chips

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.