DALLAS (AP) — Sluggish demand amid the weak global economy slashed Texas Instruments Inc.'s profit by one-third in the second quarter, and the chip maker warned that its customers are becoming "increasingly cautious" about placing new orders.
Texas Instruments, which makes chips for products ranging from cell phones to laptops and video games, said that backlog grew 5 percent in the latest quarter but orders slowed in June and coverage for September is lower than normal.
CEO Rich Templeton said customers and distributors likely have low inventories but are reluctant to put in orders due to the weakness around the globe. However, he said TI is ready to ramp up shipments quickly if demand picks up in the third quarter.
The company earned $446 million, or 38 cents per share, in the April-June period including charges of 6 cents per share related to the company's 2011 acquisition of National Semiconductor. That's down 34 percent from $672 million, or 56 cents per share, in the same period a year earlier, but results did top analysts' average profit estimate of 34 cents per share.
Revenue slid 4 percent to $3.34 billion from $3.45 billion, just shy of analysts' average $3.35 billion estimate. TI said its orders totaled $3.41 billion in the second quarter, down 5 percent year-over-year but up 5 percent sequentially.
For the current quarter, TI forecast revenue of $3.21 billion to $3.47 billion and earnings of 34 cents to 42 cents per share. The earnings estimate includes charges of 7 cents per share.
Analysts are predicting higher revenue of $3.54 billion and earnings including items of 43 cents per share.
Shares of the Dallas-based company closed the regular session down 43 cents at $26.82 before the report, and slipped 13 cents after hours.