* First-quarter revenue, EPS beat on insurance payment
* Current-quarter rev seen between $3.22 bln and $3.48 bln
* Stock rises after report
(Adds comments from conference call, share price update)
By Sinead Carew and Noel Randewich
April 23 (Reuters) – Texas Instruments Inc forecast
second-quarter revenue growth ahead of Wall Street estimates,
signaling the end of a prolonged inventory-related decline in
demand, sending its shares up 4 percent in late trading.
The maker of chips used in everything from communications
equipment to cars said it expects revenue growth for the rest of
the year due to a broad-based improvement in demand after
several quarters when its clients cut inventories.
While TI’s clients are not yet showing signs of expanding
their chip stockpiles, the fact that they have stopped reducing
inventories is boosting TI’s orders.
“We think it is pretty sustainable. Our customers were
really lean on inventory,” Chief Financial Officer Kevin March
said. “At a macro level the global economy looks like its
growing modestly … so we’re probably in for growth for the
rest of the year.”
Bernstein analyst Stacy Rasgon said any move by TI’s
customers to increase inventory levels would boost the company,
which says it has plenty of spare manufacturing capacity.
“Now the question becomes – do you just float around down
here for a while or do you start to see channel restocking?”
Rasgon said. “It’s hard to call, but the potential is there if
the demand is there. You’ll see upside on the top line as well
as the margins.”
Unlike rival Qualcomm Inc, which warned last week
that supply constraints would limit its revenue, March said TI
should not face a manufacturing capacity shortage this year even
if demand accelerates.
“Its too early to tell just how robust it will be. We are
certainly prepared if it turns out to be very robust,” he said.
GROWTH RESUMPTION
The maker of chips used in products ranging from cellphones
to industrial equipment forecast current-quarter revenue of
$3.22 billion to $3.48 billion.
This implies a mid point above analyst expectations for
$3.29 billion, according to Thomson Reuters I/B/E/S.
It set an earnings target of 30 cents to 38 cents per share
for the current quarter.
TI posted a first-quarter net profit of $265 million, or 22
cents per share. Its net profit was $666 million, or 55 cents
per share in the year ago quarter.
Its latest quarterly profit was helped by a 3 cents per
share gain from an insurance payment related to last year’s
earthquake in Japan, which resulted in damage and a production
suspension in two TI factories.
Revenue fell 8 percent to $3.12 billion from $3.39 billion,
but was slightly ahead of the consensus Wall Street forecast for
$3.06 billion, also helped by the insurance payment. TI’s own
revenue target was $2.99 billion to $3.11 billion.
TI shares rose 4 percent in late trading to $33.15 after
closing down 1.79 percent at $31.89 on Nasdaq.
(Editing by Richard Chang, Bernard Orr and Andre Grenon)
