Computer chip maker Texas Instruments Inc. said profit more than tripled from a year ago, meeting Wall Street expectations, as demand increased for its products in a range of electronic gadgets.
TI, which makes chips for more than half the world's mobile phones, said it earned $441 million, or 25 cents per share, in the April-June quarter, compared to $121 million, or 7 cents per share, a year earlier.
Analysts had expected TI to earn 25 cents per share, according to a survey by Thomson First Call. The company had signaled in June that it would earn 24 cents to 26 cents per share.
Revenue was $3.24 billion, up 39 percent from $2.34 billion a year ago, when the semiconductor industry was still mired in a three-year slump. Analysts had predicted $3.23 billion -- again, the midline of the company's own forecast in June.
Dallas-based TI said it would earn 26 cents to 29 cents per share on sales of $3.2 billion to $3.44 billion in the current quarter -- both in line with Wall Street forecasts.
The company said sales were driven by strong demand for chips used to run a broad range of electronic devices, especially phones and other wireless devices -- up 15 percent from the first quarter and 64 percent in a year.
Chief executive Rich Templeton declared that 2004 "is on course to be a very strong year," with semiconductor revenue at an all-time high and operating profit approaching a record.
Shares of TI had gained 83 cents or 4 percent, to $21.76, in trading before the report was released. In after-hours trading, they gained another 74 cents.
The shares hit a 52-week high of $33.98 in January but have dropped about 36 percent since then, hurt by weakness at TI's biggest customer, Finnish cellular phone maker Nokia.
Ron Slaymaker, TI director of investor relations, said in an interview that TI's growth in wireless revenue shows a broad customer base. He said critics were putting too much emphasis on TI's exposure to Nokia's problems.
Erach Desai, an analyst for American Technology Research, said he was concerned by the slowdown in orders but willing to accept the company's explanation -- "at least for now."
"I don't think it's a roll-over in the (semiconductor) cycle -- look at their year-over-year growth in semiconductor sales," he said. "But I'll be monitoring that."
Lehman Brothers and Merrill Lynch have downgraded TI shares this month -- the latter to an unusual "sell" rating. However, some analysts think the shares have been oversold, and Deutsche Bank recently raised its rating to "buy" from "hold."
In the first six months of this year, TI earned $808 million, or 46 cents per share, on revenue of $6.18 billion, compared to profit of $238 million, or 14 cents per share, on sales of $4.53 billion in the same period last year.
Copyright © 2004 The Associated Press. All rights reserved. The information contained in the AP News report may not be published, broadcast, rewritten or redistributed without the prior written authority of The Associated Press.