), or "TI," narrowed its revenue and earnings expectations for the
third quarter of 2012.
The chipmaker now expects sales of $3.27-$3.41 billion versus
its previous guidance of $3.21-$3.47 billion. The earnings outlook
range has also been raised to 38-42 cents per share from the
previous guidance of 34-42 cents.
Management stated that insurance receipts of $60 million related
to the 2011 earthquake in Japan and various restructuring
activities will likely help earnings in the upcoming quarter. The
company also said that the wireless segment is doing better than
initially expected owing to new tablet launches that use the
company's ARM-based OMAP processors. However, TI expects the demand
for the chips to be at the low end of its expectations due to weak
markets in Europe.
Recently, chip maker
) slashed its sales forecast for the third quarter on account of
lower-than-expected demand for the chips and a challenging global
economy. Intel shares fell 3.61% to $24.19 following the guidance
Hence, most of the investors expected TI to lower its guidance
due to soft market conditions. But fortunately, the company has not
reduced the midpoint of the guidance, allaying investor
TI's compelling product line-up, the increased differentiation
in its business, restructuring activities and lower-cost 300mm
capacity should drive earnings in the longer term. In the second
quarter, TI posted decent numbers, with both revenue and earnings
surpassing our expectations.
Increasing competition from
Maxim Integrated Products
) are concerns.
Currently, Texas Instruments has a Zacks #3 Rank, which
translates into a short-term Hold rating.
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