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Texas Instruments (TXN) |
TRS
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 Posted: Mon Mar 12, 2007 2:45 pm Post subject: Texas Instruments (TXN) |
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| TXN kept things unchanged. What's disappointing if you are a long is that they set the bar extremely low during their 4th q con call ( guiding lower )and couldn't even keep the top line revenue estimate. No bottom yet, not even close in this sector. |
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HenryTo
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| Posted: Wed Apr 25, 2012 4:49 pm Post subject: |
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Morningstar on TXN's 1Q results.
| Quote: | | Texas Instruments TXN reported decent first-quarter results, and gave investors a fairly bright second-quarter outlook that was consistent with our expectations. The results and outlook imply that business conditions within the analog chip industry are improving. We're maintaining our fair value estimate. Quarterly revenue was $3.12 billion, just above the high end of the firm's revised projected range of $2.99 billion to $3.11 billion put forth in early March. Revenue was down 9% sequentially, and 8% from the year-ago quarter. Revenue from TI's core analog chip business was down 1% sequentially. Many analog chipmakers saw a decline in sales in the second half of 2011, as a weak global economy caused TI's customers to draw down their inventory levels, rather than place new chip orders. However, TI saw a bottom to these order patterns in the March quarter, and expects a nice rebound in the June quarter. Sales of embedded chips were up 7% sequentially, but still down 11% from the year-ago quarter, as chip orders from communications infrastructure customers improved, but were still below historical levels. Meanwhile, the big revenue decline came from lower demand for TI's wireless chips. Baseband and connectivity chips used in Nokia’s NOK legacy Symbian platform plummeted, as Nokia transitioned its production toward devices that run Microsoft's MSFT Windows Mobile operating system. Additionally, not only did TI's core wireless business suffer from seasonal weakness in the March quarter--as handset manufacturing activity tailed off after the holiday season--but we suspect that TI's exp osure to another struggling handset maker, Research in Motion RIMM, further weighed on the company's handset chip business. Finally, the company received $65 million in revenue from insurance proceeds. These proceeds stemmed from earthquake-related damage to TI’s facilities in Japan in March 2011. On the profitability front, lower sales levels and integration costs associated with National Semiconductor led TI to earn a 13% operating margin this quarter, down from 27% in the March 2011 quarter during peak business conditions, but up from 11% in the December 2011 quarter, when integration costs were much higher. For the June quarter, TI expects revenue in the range of $3.22 billion to $3.48 billion, which would represent a 3% to 11% sequential sales increase (5% to 14%, excluding the insurance proceeds from the March quarter). TI expects chip orders to improve across several end markets, such as in dustrial and communication infrastructure. The firm doesn't see its customers taking on more chip inventory, but simply maintaining their lean inventory levels on hand. This should allow TI's chip shipments to truly match customers' end market demand. The outlook echoes some comments made by one of TI's analog peers, Linear Technology LLTC, last week. Finally, we also suspect that about a couple of percentage points of the forecasted sequential increase will come from TI's noncore calculator business before back-to-school season. All in all, we’re pleased to see that TI is seeing brighter business conditions today, and that TI appears to have weathered the latest chip industry downturn quite well. |
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HenryTo
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| Posted: Fri Mar 09, 2012 1:48 pm Post subject: |
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Mornignstar on TXN's latest midquarter update.
| Quote: | | Texas Instruments TXN provided investors with a mildly disappointing midquarter update, lowering its forecast revenue and earnings per share range for the March quarter. TI's revised forecast revenue range is $2.99 billion-$3.11 billion, down from the outlook of $3.02 billion-$3.28 billion announced in January. At the midpoint, revenue is expected to decline 11% sequentially, versus the prior midpoint of 8%. TI blames the weakness entirely on its ongoing wireless chip business, which includes both OMAP application processors and connectivity chips used in smartphones and tablets. The firm expected normal seasonal weakness in the first quarter, as handset manufacturing activity wound down after the holiday season. However, its customers presumably didn't sell enough of their products during the holidays and are holding on to higher-than-expected inventories of their devices, in turn placing even fewer new chip orders with TI. The firm's notable connectivity chip customers include Nokia NOK and Research in Motion RIMM, both of which have struggled in the handset market in recent quarters. However, TI's OMAP processors were designed into a host of noteworthy new devices at the end of 2011, such as Amazon's AMZN Kindle Fire tablet and Motorola Mobility's MMI Droid Razr, so TI's guidance cut also implies that sales of these devices didn't live up to expectations. TI also hinted that, because end market demand for these newly released devices remains to be seen, it had a more difficult time than usual in making its initial wireless chip revenue forecast for the March quarter. On the bright side, TI expects revenue growth in the June quarter and remains confident that it has reached the bottom of the slowdown that weighed on the analog chip industry in the second half of 2011. During the downturn and in the face of a shaky macroeconomic environment, TI's analog customers drew down their chip inventory levels rather than place new orders with the firm. However, TI believes that first-quarter revenue for its higher-margin analog and embedded chip businesses will be roughly flat with the fourth quarter, signaling a bottom to the downturn. TI's optimism for the second quarter stems from a recent improvement in chip orders, as well as a belief that both customers and distributors are carrying cautiously low levels of inventory, implying that a rush of new orders may be on the horizon. We believe TI is undergoing a bit of a transition at the moment, but will emerge as a more profitable firm in the long term. It continues to integrate recently acquired National Semiconductor as well as wind down its wireless baseband chip business (which did not contribute to the lower sales outlook, but is still expected to be $200 million lower than fourth-quarter levels and should be responsible for 6% of TI's sequential sales decline). Looking past these issues, however, we expect the company to not only recognize a greater percentage of sales from higher-margin analog chips, but also see improved top-line growth as headwinds from the baseband wind-down subside. |
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HenryTo
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HenryTo
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Location: Los Angeles, California
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| Posted: Tue Oct 25, 2011 3:58 pm Post subject: |
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Morningstar on TXN's 3Q earnings:
| Quote: | | Texas Instruments TXN reported third-quarter results and gave investors a fourth-quarter outlook that was in line with our tempered expectations, and we are maintaining our fair value estimate. Revenue was $3.47 billion, exceeding the firm's revised forecast of $3.23 billion-$3.37 billion discussed in early September, as sales during the month of September were better than anticipated. Revenue was flat with the second quarter, but TI normally sees a 7% increase in third-quarter sales because of seasonal patterns, and revenue was down 7% from the year-ago quarter. TI's wireless chip business was up 4%, thanks to healthy adoption of TI's mobile processors used to power a wide variety of upcoming smartphones and tablets, such as Amazon's AMZN upcoming Kindle Fire. TI also saw a recovery in DLP projector sales, which were down significantly earlier in the year because of manufacturing disruptions in Japan associated with the earthquake that hit the region. On the downside, TI's embedded chip business was down 10% sequentially and analog chips were down 2%, as a shaky global economy weighed on demand. Gross margins held up well, however, at 50%, and the company still managed to generate a strong 24% operating margin, despite some additional acquisition costs associated with the recent purchase of National Semiconductor. For the December quarter, TI expects revenue of $3.26 billion-$3.54 billion, which at the midpoint would represent a 2% sequential sales decrease. TI's revenue will benefit from a full quarter of sales of National's chips. Excluding National and the typical 3% decline in TI's fourth-quarter revenue due to seasonally lower sales of TI's noncore calculator business, the internal chip business will be down 6% (at the midpoint) next quarter, whereas this business is typically flat in the December quarter. TI's internal sales forecast is consistent with the outlook announced by analog peer Maxim Integrated MXIM last week. While TI refused to call a bottom in this latest cyclical downturn, it did indicate that inventory is lean throughout the supply chain. If end market demand and economic activity pick back up, TI could be in line to see a snap-back in chip demand in the near term. TI and other analog chipmakers bounced back from the credit crisis in late 2008 and early 2009 with a bit of a V-shaped recovery, and our fair value estimate implies a similar upturn in the months ahead. We're also encouraged by the selection of TI as the mobile processor of choice in Google's GOOG latest Android rollout, which should give the firm a first-mover advantage in a bunch of mobile devices that should hit the market fairly soon. |
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HenryTo
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HenryTo
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Posts: 11742
Location: Los Angeles, California
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| Posted: Wed Apr 20, 2011 12:10 am Post subject: |
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Morningstar on TXN's 1Q results:
| Quote: | | Texas Instruments TXN reported decent first-quarter results and gave investors a second-quarter outlook that implies the earthquake in Japan may not deliver a crushing blow to the company's near-term results. Revenue for the quarter was $3.39 billion, essentially at the midpoint of the company's revised forecast of $3.34 billion-$3.48 billion announced in early March. Sales at these levels represent a 4% sequential decrease but were up 6% from the year-ago quarter. The disaster in Japan weighed on TI's sales in March, as the quake interrupted two of TI's factories. TI also recognized softer sales of its wireless baseband chips, a business that it is winding down and will probably see declining revenue in the quarters ahead. Analog and embedded chip sales were abou t even with the prior quarter, as TI saw healthy demand from automotive customers, among others. Meanwhile, TI's ongoing handset chip business (excluding baseband) was down modestly, which is typical of seasonal production patterns in the handset industry. TI's operating margins were still a healthy 27%, but lower sales levels and an additional $30 million in losses from the Japan quake caused TI's earnings per share to come in at $0.55, a penny lower than the midpoint of its previous guidance. For the June quarter, TI expects revenue of $3.41 billion-$3.69 billion, which would represent a 1%-9% sequential sales increase, as well as EPS of $0.52-$0.60. Japan will again weigh on second-quarter results, as the firm would have forecast 10%-plus sales growth and an extra $0.10 in EPS before the disaster. TI doesn't see interruptions to tech demand in Japan, but concedes that it is still too early to tell if the semiconductor supply chain will be disrupted. Nonetheless, we're a bit relieved that TI doesn't see the disaster taking an even greater toll on the firm. TI is still optimistic about true end market demand and sees "seasonal or better" sales growth in the back half of the year once problems in Japan subside. Meanwhile, we're not overly alarmed that TI's inventory rose for the second straight quarter, as we'd prefer to see the firm build up some inventory in case the disaster has a significant effect on the semiconductor supply chain. |
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HenryTo
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| Posted: Wed Apr 06, 2011 1:23 am Post subject: |
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Morningstar on TXN's acquisition of NSM:
| Quote: | | We're surprised by Monday's announcement that Texas Instruments TXN has agreed to acquire National Semiconductor NSM in a $25 per share, $6.5 billion all-cash transaction. Analog chipmakers rarely make deals of this size because of the proprietary nature of their designs and the high likelihood of significant product overlap. TI will acquire National's well-respected power management chip business, and the merger combines the top two players in this chip subsegment, but TI's power management chip portfolio focuses on the computer and handset end markets and National's is now skewed more toward industrial applications, so the two firms may not see much product overlap. That said, the analog industry is highly fragmented, and our initial thoughts are that TI is spending quite a bit of its hefty cash cushion to boost the firm's overall market share in the analog industry by about 3%. Furthermore, stout competition from a host of well-capitalized firms, such as Maxim Integrated Products MXIM, is likely to continue in power management chips. TI has recently made some smart moves, in our opinion, to expand its manufacturing capacity in order to drive internal growth in the analog chip market and gain market share from National and others. We would have preferred to see this strategy play out over time, especially given TI's healthy internal power management chip growth in recent years. Unless TI is able to generate above-average revenue growth from National's product portfolio in the years ahead, we still don't clearly see why the deal was necessary at this time. We are placing our fair value estimates for TI and National Semi under review as we gain further detail on the transaction. We are also putting National's BBB issuer credit rating under review, but with positive implications, based on our assumptions of the combined firm's pro forma capitalization and also assuming that National's debt is guaranteed by TI. Although the deal will be accretive for TI in the first year (excluding deal costs), our initial reaction is that the company overpaid for National, which has seen below-average revenue growth in recent quarters. Additionally, even though recent debt offerings from analog chipmakers were at favorable interest rates, we're not too keen on the $3 billion-$4 billion of debt that TI will issue as part of the deal, nor the spending of cash that could have been used to boost TI's dividend or go toward the firm's $7.5 billion stock-buyback program. We will probably raise our National fair value estimate to $25, however, as we would be surprised if another bidder emerged. We expect the deal to be closely analyzed by regulators, but we don't believe there will be enough antitrust scrutiny to block the deal. We are skeptical that the TI-National deal will spur a new wave of merger and acquisition activity among the larger analog chipmakers that we cover, such as Maxim, Linear Technology LLTC, or Analog Devices ADI, other than perhaps the industry's usual record of making small to medium bolt-on acquisitions to boost product portfolios. |
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HenryTo
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| Posted: Thu Mar 10, 2011 1:39 am Post subject: |
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Morningstar on TXN's latest mid-quarter update:
| Quote: | | We're encouraged by Texas Instruments' TXN comments at its midquarter conference call with investors, as management believes TI is facing a mild seasonal correction rather than the start of a severe cyclical downturn. For the third straight quarter, the company updated its financial forecasts by narrowing the range of its sales and earnings per share estimates for the upcoming quarter. TI's latest forecast revenue range is $3.34 billion-$3.48 billion, compared with the firm's previous outlook of $3.27 billion-$3.55 billion announced in January. Similarly, TI's revised EPS estimate is now $0.56-$0.60, versus the prior EPS fore cast of $0.54-$0.62. Based on the revised forecast, TI expects sales to decline 1%-5% sequentially, and we estimate that the firm will turn in a 26%-28% operating margin in the March quarter. TI's comments, and the updated forecast, indicate that the firm hasn't been surprised by business conditions in recent weeks. Demand for TI's chips in consumer-related devices, such as handsets, gaming, and televisions, should experience seasonal weakness in the March quarter as a result of lower postholiday production. TI also expects a hefty decline in wireless baseband chip sales next quarter; the gradual wind-down of this business should remain tied to Nokia's NOK phaseout of Symbian-based handsets over the next couple of years. On the bright side, TI still sees healthy near-term demand from the industrial and automotive end markets, which we think is a good sign for TI's higher-margin analog and embedded chip businesses. The firm also indicated that recent inventory corrections appear to be behind it. TI traditionally sees high-single-digit revenue growth in the second quarter, and we estimate that the firm is on pace to recognize growth in this range next quarter. In addition to healthy analog chip sales, TI's mobile processors have a high-profile design win in Research in Motion's RIMM upcoming Playbook tablet device; robust demand for this product would give the firm another near-term shot in the arm. |
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HenryTo
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| Posted: Thu Dec 10, 2009 5:35 am Post subject: |
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Texas Instruments raises its 4Q guidance:
http://news.morningstar.com/newsnet/ViewNews.aspx?article=/DJ/200912081651DOWJONESDJONLINE000509_univ.xml
| Quote: | | Analysts at Wedbush Securities said in a note Monday that strong order patterns have continued into the current quarter at TI amid strong demand for personal computers and other consumer and communications products. But analysts at Auriga USA said TI's customers "are becoming somewhat more hesitant to add additional inventory ahead of an uncertain post-holiday season." |
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rffrydr
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| Posted: Sat Jun 07, 2008 9:10 am Post subject: |
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From the Broker:
| Quote: | | TXN’s Mid Quarter Update: After the close, TXN will provide an update on business conditions. TXN has crept higher since late April, while news flow out of the chip sector has been mixed. On one hand, MRVL and NSM provided favorable comments. On the other hand, IFX noted weakness in its handset business and delayed orders from NOK. The earthquake in China and restructuring of the telecom industry could pose a threat to TXN’s handset business. There are multiple reports discussing slower consumer spending in China post the earthquake. Moreover, high inflation rates could start to cool the growth rate of spending on telecom product – disposable income growth in India and China may slow. For the Quarter, TXN is expected to earn $.46 per share on sales of $3.476 bln. If TXN disappoints, which may be very possible, the outlook for technology will sour quickly. The market is under the impression that inventories are lean and demand is stable firm. Note Friday, contract demand prices firmed bolstering the bullish psychology of the market. |
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