Weakness in PCs, TVsBy Reuters | Print
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Chipmakers National Semiconductor and Texas Instruments disappointed analysts with lower than expected quarterly outlooks, citing weak demand for personal computers and other electronic devices.
While Texas Instruments kept the midpoint in its guidance range for revenue and earnings per share in line with analysts' expectations, its shares fell 1.4 percent because some investors were disappointed it did not raise its targets.
Ron Slaymaker, TI's head of investor relations, said that on top of weakening demand for personal computers and related storage products, consumers also appeared to be buying fewer televisions than expected this quarter.
While TI was bullish on smartphones, National Semiconductor said it expects the weak economy to limit sales growth for its chips that handle backlighting and camera flashes on smartphones, Macleod said.
Snyder noted that TI's guidance followed several quarters in which the company said it had trouble keeping up with customer orders because demand was so strong.
"In this environment when you're not raising guidance and other folks are indicating softness it's not going to be taken well," Snyder said.
National Semiconductor said its net profit in the first quarter was $89 million, or 36 cents per share, up from $30 million in the year-ago period. That was a little above analysts' average expectation of 34 cents per share, according to Thomson Reuters I/B/E/S.
Its revenue in the quarter was $412 million, a little less than the $415 million expected by analysts.
TI's new outlook range implied a midpoint of 69 cents and $3.70 billion, which was in line with the average analyst expectation for earnings of 69 cents a share on revenue of $3.689 billion according to Thomson Reuters I/B/E/S.
In July, TI had set earnings per share and revenue targets also with a mid-point of 69 cents and $3.70 billion.
Asked about fourth-quarter demand during a conference call, Slaymaker declined to give specific guidance except to note that TI's revenue typically falls in that period as the prior three months is boosted by sales of calculators to students going back to school in September.
He did say, however, that the company expects a growth spurt within the next year from the expansion of wireless services in India. (Reporting by Noel Randewich in San Francisco and Sinead Carew in New York; Editing by Richard Chang)