Microchip bellwether Texas Instruments Inc
The maker of chips used in products ranging from cars to cellphones said it expects quarterly earnings between 61 cents and 65 cents per share on revenue of $3.43 billion to $3.57 billion.
The new outlook implies a midpoint of 63 cents and $3.5 billion, which is in line with average analyst expectations according to Thomson Reuters I/B/E/S.
In October, Texas Instruments warned its fourth-quarter revenue would be affected by slow demand for chips used in consumer products like computers and televisions and that growth in industrial chips would be less spectacular after a year of strong expansion.
The company in October had forecast that its revenue in the quarter ending in December would fall sequentially to between $3.36 billion to $3.64 billion, also implying a midpoint of $3.5 billion. Sales in the third quarter were $3.74 billion. It had forecast fourth-quarter earnings per share of 59 cents to 67 cents.
Shares of Texas Instruments, which is increasingly focusing on its analog chip business, dipped 0.9 percent after-hours after closing up 1.40 percent at $33.41.
Chip sales often speed up in the third quarter, as manufacturers rush to build consumer products for the holiday season, and then slow in the final months of the year.
Growth in recent months has also remained weak as the U.S. economy continues to struggle and unemployment remains high.
Worldwide semiconductor sales were flat in October compared to September and up 20 percent from October 2009, according to the Semiconductor Industry Association.
Everybody is cautious on the consumer. So if the consumer reacts a little bit better and the sentiment improves then that possibly becomes a tailwind in the first half (of 2011), said Vijay Rakesh, an analyst at Sterne Agee.
Global semiconductor sales next year will likely expand 4.5 percent, according to World Semiconductor Trade Statistics, an industry organization.
(Reporting by Noel Randewich; Editing by Richard Chang, Phil Berlowitz)