6/12/2003 - Texas Instruments Incorporated (NYSE:TXN) said that its sequential revenue growth in the second quarter will be at the lower end of its previous expectations due to reduced sales of semiconductors to wireless customers. Wireless customers are experiencing a slowdown in demand for handsets and excess inventory, particularly in Asia. Demand for TIís semiconductor products in other markets continues to be robust.
As a result, TI now expects total sequential revenue growth of about 5 percent, instead of its original forecast of about 7 percent. Inside the total, TIís semiconductor segment now expects sequential growth of about 2 percent instead of about 4 percent. The companyís other business segments, Sensors & Controls and Educational & Productivity Solutions, remain on track to meet original expectations.
TI expects wireless semiconductor revenue to decline about 10 percent sequentially in the second quarter and other semiconductor revenue to increase by more than 5 percent. Compared with the second quarter of 2002, wireless revenue should increase by more than 10 percent and other semiconductor revenue should increase by more than 5 percent.
Earnings per share are now expected to be about $0.06, plus or minus a few cents, instead of about $0.08, plus or minus a few cents. The expected reduction in earnings is due about equally to lower revenue and higher charges associated with restructuring in certain of the companyís manufacturing facilities. The company recently expanded its previously-announced restructuring actions to include the reduction of about 250 jobs in Semiconductor manufacturing operations in Japan. Total restructuring charges for the quarter are now expected to be about $55 million instead of $40 million, primarily due to higher-than-expected severance costs in the current quarter and the addition of the action in Japan.
ďAs we noted in our April conference call, some inventory of wireless semiconductors was built in Asian markets, particularly China, toward the end of the first quarter. That inventory, which would have been successfully worked through under normal conditions, instead stalled as demand has weakened in those markets. We believe the weakness in demand is largely due to the ongoing economic impact associated with SARS, and should abate as the health concerns are resolved,Ē said Tom Engibous, TI Chairman, President and CEO.
About Texas Instruments
Texas Instruments Incorporated provides innovative DSP and analog technologies to meet our customers' real world signal processing requirements. In addition to Semiconductor, the company's businesses include Sensors & Controls, and Educational & Productivity Solutions. TI is headquartered in Dallas, Texas, and has manufacturing, design or sales operations in more than 25 countries.
Texas Instruments is traded on the New York Stock Exchange under the symbol TXN. More information is located on the World Wide Web at www.ti.com.
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