Texas Instruments Inc has reported a mediocre fourth-quarter performance that was heavily-laden with one-time charges. TI saw a net loss of $285m on revenue down 1.3% at $2.43bn, compared to a loss of $29m a year ago. Results for the quarter include a charge of $461m stemming from the purchase of Amati Communications Corp and a restructuring charge of $42m. Net of these items, TI says income from continuing operations was $219m, or $0.55 per share, but some convoluted accounting was necessary to arrive at that figure. That level is more than double the operating profit of the year-earlier period. At any rate, the First Call consensus was looking for $0.59. The disappointing results are largely attributable to a decline in DRAM prices by about 40% from the third quarter. For the year, net income was $1.81bn on revenue down 1.9% at $9.75bn, up from net income of $63m last year. Earnings per share for the year were $4.54, up from $0.17 in 1996. Yearly results include charges totaling $537m and a gain of $1.47bn from the sale of the company’s defense business. Exclusive of these items, income from continuing operations was $809m, or $2.03 per share. Looking ahead, TI says that although it expects the chip industry to grow by 10% in 1998, up from 5% last year, that’s still below the industry’s traditional 15% growth rate. TI’s flagship digital signal processor chip business is expected to grow about 30% this year, the same as in 1997. It is wary of further price declines in DRAMs, as well as the Asian economic crisis, a combination which it hints will likely have an adverse effect on first-quarter results. TI says it too is part of the DSL Digital Subscriber Line initiative to be announced next week at the ComNet show in Washington DC (CI No 3,330). Despite the less-than-good news, TI shares gained $1.50 to close at $47.75 on Wednesday.
