TI Guidance Lynching Itself & Peers (TXN, QCOM, BRCM, ADI)

Mobile chip giant Texas Instruments (NYSE: TXN) has posted earnings of $0.43 per share and $3.39 billion in revenue.  First Call had estimates of $0.44 on $3.40 billion in revenue.  Back on September 9 it gave guidance of $0.42 to $0.47, within the $0.41 to $0.47 offered in July; and it gave revenue guidance of $3.33 to $3.47 billion, also within the $3.26 to $3.54 billion range offered.  Unfortunately, it looks too conservative even for those already braced for bad news.

The company said that it is lowering guidance based on weak ordertrends over the past few months and in anticipation of declining demandit reduced its own inventory aggressively in the third quarter.  Itwill also continue to reduce inventory more rapidly in Q4 as well as tocut expenses and cap-ex.

As far as what lies ahead in Q4, it forecast $0.30 to $0.36 EPS and$2.83 to $3.07 billion in revenue.  First Call has the nextquarter-end report projections at $0.43 EPS and $3.34 billion inrevenue.  While everyone was ready for lower numbers, these seem quitea bit lower than what we would have expected.

Shares closed up almost 2% in normal trading. They have backed offby over 5% to under $17.00 in after-hours trading.  Be advised that theprior 52-week low was $16.25.

These results were also bad enough to pull down other mobile chip giants.  Qualcomm (NASDAQ: QCOM) is down 1.1% at $39.85 in after-hours trading; and Broadcom (NASDAQ: BRCM) is down almost 1% in after-hours trading at $14.27 ahead of its own earnings tomorrow.  Analog Devices (NYSE: ADI) is also down almost 2% at $19.93.

Jon C. Ogg
October 20, 2008