By Angela Gunn, Betanews
If you look at Texas Instruments' year-over-year results -- ouch, down 27%. If you look at the numbers sequentially -- hey, up 18%, breaking a five-quarter slide. So, based on what we've all been through over the last year, what would you make of TI's numbers?
Texas Instruments took an optimistic but cautious tone on its earnings call, announcing net earnings of $260 million and an EPS of 20 cents, beating expectations. In addition, the company set forth its first predictions for Q3: revenue of between $2.5 and $2.8 billion, with earnings per share of between 29 and 39 cents.
Not bad. Looking ahead, according to TI chairman and CEO Rich Templeton, the company expects sequential growth and is keeping a slightly wary eye on its inventory levels and supply chains, which have fluctuated during the quarter in slightly undesirable ways. TI in Q2 had "a few areas where lead times have stretched out during the quarter.... I'd probably characterize inventory levels as being somewhat lean" in spots, he said. Overall, channel inventory during the quarter was brought down by 10%.
Sales of analog and embedded chips led profits for TI, with analog chips up 21% -- a great deal of that due to interest in its power-management products. Embedded chips for cars didn't do so well (hint: who's buying new vehicles right now?), but overall the category was up about 9%. the company's DLP and ASIC lines, on the other hand, saw overall decreases.
There's a difference in an economy like this between rising and ceasing to fall, and Templeton sounded determinedly cautious on the call -- in other words, we are once again cautioned against assuming we're out of the woods already. While the company expects sequential growth above analysts' previous estimates, he said that since "end demand trends remain uncertain," -- specifically, the specter of high unemployment and lower consumer spending as he head into the holiday season -- "we will keep our operations flexible."
In a similar vein, Templeton commented in the earnings release that "it will likely take some time before the economy strengthens," and that the company's feeling a lack of visibility right now (leading to those broad estimates for Q3). Echoing that thinking, CFO Kevin March is on the record as saying that "We're getting close to finding the bottom of the economy although I don't think we've found it yet." So today's results -- glass half full, glass half empty, or can we even see clearly into the glass?
Copyright Betanews, Inc. 2009