Texas Instruments' Guidance Pleases Skeptics With Mid-Quarter Update

Texas Instruments Inc. (NASDAQ: TXN) has issued its mid-quarter update as a harbinger of what to expect for its third quarter report.  The chip-maker sees earnings of $0.38 to $0.42 EPS and sees sales of $3.27 to $3.41 billion. When the company gave its earnings report in July its third quarter guidance was $0.34 to $0.42 in earnings per share and $3.21 to $3.47 billion in revenue. Be advised that TI did say that earnings would hit by $0.07 in charges when it gave guidance last quarter.

Thomson Reuters had estimates as of this morning at $0.45 EPS and $3.34 billion in revenue. Unfortunately, TI gave no other details and they may not even come out in the conference call.

TI shares closed down by 0.3% at $28.58 against a 52-week range of $25.78 to $34.24.  Thomson Reuters has a consensus analyst price target of $31.46. Shares are trading up 1.4% at $28.98 in the after-hours session since its guidance did not have a warning in it. It may also be worth noting that TI shares closed between some key moving averages today: the 200-day moving average is $30.05 and the 50-day moving average is $28.31.

We would note that Intel Corporation (NASDAQ: INTC) led the chip sector off with a bad warning last week and shares finally closed up marginally today. Intel shares lost over 7% of their value in the two trading sessions combined after the warning.

The Market Vectors Semiconductor ETF (NYSEMKT: SMH) has not been battered along with Intel and its shares closed up 0.5% at $32.58 on Tuesday. This chip-stock ETF saw its shares gain by 0.4% to $32.70 initially in the after-hours session.

JON C. OGG