Chip maker Texas Instruments Inc. on Monday reported a 28 percent increase in first-quarter profits but its outlook for the second quarter fell short of Wall Street expectations and said it has experienced some slowing in sales of its chips for cell phones.
The Dallas-based company earned $662 million, or 49 cents per share, for the quarter ended March 31, compared with $516 million, or 35 cents per share, a year ago. The company said it has been focusing more on analog chips, which are often more profitable than digital varieties.
Revenue grew 3 percent to $3.27 billion from $3.19 billion in the year-earlier period. While revenue for chips used in cell phones and other wireless products dropped 18 percent from the fourth quarter, a period which would ordinarily experience a decline of 5 percent said Ron Slaymaker, TI's vice president of investor relations.
Analysts were expecting earnings of 16 cents a share on revenue of $315.5 million, according to an estimate from Thomson Financial.
The Nasdaq-100 After Hours Indicator, which tracks the evening action of the tech-heavy index's leading stocks, lost 5 points, or 0.3 percent to 1,908.
TI stock was down 2.1 percent to $29.96 after the chip maker forecast earnings per share of 42 cents to 48 cents in the second quarter, with revenue between $3.24 billion and $3.5 billion. Analysts had been estimated the company would earn 48 cents per share in the second quarter on revenue of $3.44 billion.
Given uncertainty in the near-term economy, we have become more conservative with our outlook for the second quarter, said Chief Executive Rich Templeton in a statement.