(Associated Press via NewsEdge) Texas Instruments, the leading maker of chips for cell phones, cut its profit and revenue forecast for the fourth quarter due to slower sales of semiconductors, and it warned that sales could weaken further early next year.
'These kind of corrections typically last more than a single quarter,' said Ron Slaymaker, the company's VP of investor relations. 'We don't believe this has bottomed yet.'
TI expects earnings from continuing operations of $0.37 to $0.40 per share in the October-December quarter, down from its prior forecast of $0.40 to $0.46 per share.
The company said revenue would be $3.35 billion to $3.50 billion, down from the previous prediction of $3.46 billion to $3.75 billion.
Analysts had expected fourth-quarter earnings of $0.42 per share on $3.60 billion in sales, according to a survey by Thomson Financial.
Virtually the entire revenue shortfall occurred in semiconductor revenue, which TI now expects to range between $3.28 billion and $3.42 billion, compared to an earlier forecast of $3.39 billion to $3.66 billion.
Texas Instruments said semiconductor orders are likely to weaken again in the typically slower first quarter.
But Slaymaker said there also appeared to be less demand for end products that use semiconductors.
In Texas Instruments' most important line, mobile phones, officials said demand was weakest for chips used to power advanced phones. That's bad news for Texas Instruments, which packs four or five times the dollar amount of parts in a fancier handset than a basic model.
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