Texas Instruments Q2 net dips 56 p.c

Texas Instruments Q2 net dips 56 p.c

The company's a net income declined to $260 million from the previous year's $588 million

Tuesday, July 21, 2009

DALLAS, USA: U.S. Chipmaker Texas Instruments Incorporated (TI) has reported a 56 per cent drop in the second-quarter profit. The company's a net income declined to $260 million from the previous year's $588 million for the same quarter.

The company reported a revenue of $2.46 billion, a decline of 27 per cent compared to the second quarter of 2008. However, it has increased 18 per cent against the revenue posted in the first quarter of 2009. The earnings per share (EPS) declined 55 per cent to $0.20 on a year-on-year basis.

According to the company's press release, the decline from a year ago was the result of broad-based declines across all segments. Meanwhile, the increase from the prior quarter was attributed to the strength in TI's Analog segment as well as a seasonal increase in calculators. Revenue was up sequentially in all segments.

TI's operating profit declined $490 million to $343 million compared with the $833 million in the year-ago quarter and grew $333 million compared with the first quarter.

TI said the decline from a year ago was due to lower revenue and the associated lower gross profit, as well as the negative impact of underutilized manufacturing assets and restructuring charges.

"After sharp inventory corrections in our markets during the prior two quarters, our revenue levels are beginning to more closely reflect end demand. As it will likely take some time before the economy strengthens, we have aligned our operations and expenses to be consistent with the weak environment. As a result, we are seeing healthy trends in our profitability,” said Rich Templeton, TI chairman, president and CEO.

"Analog was the biggest driver of sequential growth in this quarter with all three major businesses contributing. Particularly, our High-Volume Analog & Logic business is now showing early signs of progress from our efforts over the past couple of years to reinvigorate growth,” he added.

The company expects solid sequential growth in the third quarter. As end demand trends remain uncertain, TI will keep its operations flexible so it can quickly respond to the customers' needs, stated the press release.

In the meantime, the company continue to focus on strengthening our core businesses of Analog and Embedded Processing, it added.

©CIOL Bureau