TI Comes Clean With Guidance, Harms Chip Rivals Too (TXN, NSM, NOK, INTC, BRCM, SMH)

Texas Instruments Inc. (NYSE: TXN) may be buying National Semiconductor Corporation (NYSE: NSM) and the tech demand may still be strong for chips.  Unfortunately, the company just warned investors that its results were worst than expected.  When you think of chips, they matter to the broad economy.  Chips are used in just about anything electronic these days and the sector is often considered a leading indicator of the economy.

TI specifically noted that the recent earthquakes and tsunami in Japan, disruptions and increased costs of production, disruptions in its supply chain, and reduced or delayed demand from customers “could cause actual results to differ from the expectations of TI or its management.”  In short, several issues at once hit.  Mostly, it is Nokia Corporation (NYSE: NOK) after its warning… Too bad Nokia’s problems are not short-lived.

Revenue was guided down to $3.36 billion to $3.5 billion, down from a prior range of $3.41 billion to $3.69 billion.  Earnings were guided down to $0.51 to $0.55 versus a prior range of $0.52 to $0.60.  Thomson Reuters has estimates of $0.57 EPS and $3.55 billion in revenues.  As a reminder, when companies lower guidance for one quarter, analysts automatically trim the yearly estimates by the same amount (if not more for later quarters).

Texas Instruments Inc. (NYSE: TXN) closed down 1.8% at $32.67 and shares are down almost 5% at $31.12 in the after-hours session.  National Semiconductor Corporation (NYSE: NSM) is only down a couple cents at $24.57 since it is being acquired.

Intel Corporation (NASDAQ: INTC) is trying more and more to get into mobile chips and its shares fell 1% today and are down another 0.5% at $21.71 in the after-hours.  Broadcom Corporation (NASDAQ: BRCM) was down 1% today and its shares are down 0.4% at $33.76 in the after-hours.  The big drop where TI has a big weighting is in the Semiconductor HOLDRs (NYSE: SMH), where shares fell 2.1% to $33.55 today and where shares are down another 0.5% at $33.08 in the after-hours against a 52-week range of $24.14 to $36.99.

JON C. OGG