Texas Instruments Inc posted strong first-quarter earnings boosted by sales of digital signal processors and other chips. Net income for the Dallas-based company was $233m, or $0.58 per share, up from $11m in a charge-laden quarter ($244m) a year ago. Revenue slipped to $2.04bn from $2.19bn last year, mainly as a result of the sale of the company’s loss-making memory chip business to Micron Technologies Inc. Results for the quarter included a $41m charge resulting from the consolidation of semiconductor manufacturing operations in Japan. Without the charge, TI reported net income of $0.65, beating the First Call consensus of $0.61.
TI said overall semiconductor orders were strong, increasing 19% from a year ago, and 13% from the fourth quarter. DSP sales rose 16% from the year-ago quarter, driven, TI says, by strength in wireless communications and to a lesser extent the mass market, which more than offset a decline in modems. Gross margins rose to 44.7%, compared with 30.6% a year ago. Excluding charges, margins were 46.1%, compared with 40.6% in the year-ago quarter, and 45.5% in the prior quarter excluding charges.
Looking ahead, TI expects increased growth in its semiconductor business in the second quarter, with revenues continuing to build throughout the year based on continued strength in wireless, improvement in mass market, and recovery in hard disk drives. The company cites data from research firm Forward Concepts which indicates DSP sales are expected to increase 25% in 1999 to $4.4b, and hit $10.2bn in 2002. Analog growth, meanwhile, is expected to be 16% for the year, according to Dataquest.
