Texas Instruments Inc. (NYSE: TXN), the world's second largest maker of mobile phone chips, is scheduled to release second quarter financial results after the closing bell on Monday, July 19, 2010. Analysts, on average, expect the company to report earnings of 62 cents per share on revenue of $3.52 billion. In the year-ago quarter, the company reported earnings of 20 cents per share on revenue of $2.46 billion.
Texas Instruments Incorporated engages in the design and sale of semiconductors to electronics designers and manufacturers worldwide. The company operates in four segments: Analog, Embedded Processing, Wireless and Other. The company has successfully realigned its business to reduce focus on the commoditized, low-margin market for wireless chips. Texas Instruments expects Analog and Embedded Processing to be its primary growth engines in the years ahead.
In the preceding first quarter, the Dallas, Texas-based company reported that its net income surged to $658 million or $0.52 per share, compared to $17 million or $0.01 per share for the year-ago quarter. Revenue jumped 54% to $3.21 billion from $2.09 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of 51 cents per share on revenue of $3.13 billion. Gross margin for the first quarter improved to 52.7% from 38.6% a year earlier.
Early in June, the company raised the bottom end of its sales and earnings forecasts, citing strengthening demand in the worldwide chip market on 3G and other electronic equipment sales. The chipmaker revised its earnings outlook to a range of 60 cents to 64 cents per share, compared to the prior range of 56 cents to 64 cents per share. It also tightened its revenue guidance range to $3.45 billion to $3.59 billion, compared to the previous forecast in the range of $3.31 billion to $3.59 billion.
In April, the company doubled the analog manufacturing capacity in the North Texas facility. When completed, the factory should be able to generate annual revenues of about $2 billion, the company said.
Thanks in part to a surge in demand for mobile phones and computers, worldwide semiconductor sales reached a record $24.7 billion in May, up 4.5 percent from the prior month and a gain of 47.6 percent year over year, the Semiconductor Industry Association said recently. Last month, SIA forecast sales of microchips will rise 28 percent to $290.5 billion this year. Similarly, market research firm Gartner recently raised its 2010 forecast for global semiconductor revenue, citing better-than-expected market recovery. Global semiconductor market is now indicated to grow 27.1% in 2010 to reach $290 billion. In February, the firm expected worldwide semiconductor revenue for 2010 to grow by 19.9% over 2009.
In terms of stock performance, shares of the company are down nearly 2% since the beginning of the year.
Disclosure: Author doesn't own any of the stocks discussed here.
