10/19/2009
TheStreet.com
DALLAS (TheStreet) — The semiconductor industry could get another boost when Texas Instruments(TXN Quote) reports its third-quarter results after market close, hot on the heels of Intel’s(INTC Quote) strong third-quarter numbers.
The company’s stock has risen more than 60% since March, and gained 45 cents or 1.97%, to reach $23.30, during early trading Monday.
Texas Instruments recently raised its third-quarter sales and earnings estimate, further fuelling talk of a tech turnaround. Boosted by strength in its three major product lines, the chipmaker forecast revenue between $2.73 billion and $2.83 billion and earnings between 37 cents a share and 41 cents a share. Previously, the firm had predicted sales between $2.5 billion and $2.8 billion and earnings in the range of 29 cents and 39 cents.
Along with Intel, Texas Instruments is seen as a key barometer (subscription required) for the tech sector, providing core components for cellphones and other electronic devices. Like many tech firms, the company has felt the strain of the economic downturn, but it is now adopting a more bullish tone. Last week, for example, Texas Instruments raised its quarterly cash dividend.
Analysts surveyed by Thomson Reuters expect the company to report sales of $2.82 billion and earnings of 39 cents a share, compared to $3.39 billion and 43 cents in the same period last year.
Some analysts, however, have warned that there are still plenty of hurdles in the company’s path.
“We remain on the sidelines as TI faces several headwinds limiting revenue growth (and multiple expansion) after the recovery is complete,” wrote Adam Benjamin, an analyst at Jefferies & Company, in a note last month.
Benjamin explained that, post-recovery, Texas Instruments could see limited share gains from its High-Performance Analog products, and cited a possible falloff in its wireless sales.
Texas Instruments, which competes with Qualcomm(QCOM Quote) and STMicroelectronics(STM Quote), is nonetheless laying the foundations for future expansion, recently throwing down $172.5 million for a chip manufacturing plant owned by German firm Qimonda.
