Chipmaker Texas Instruments Inc. (TXN), Thursday narrowed its earnings and revenue outlook for the third quarter, but maintained the midpoint of the forecast ranges. TI's current forecast comes as a bellwether, indicating that the recent global rebound in the worldwide chip market has started waning.
For the third quarter, the Dallas, Texas-based company now expects earnings of $0.66 to $0.72 per share, compared to its prior estimate of $0.64 to $0.74 per share.
On average, 33 analysts polled by Thomson Reuters expect the company to report earnings of $0.69 per share for the third quarter. Analysts' estimates typically exclude special items.
Revenue is expected in the range of $3.62 billion to $3.78 billion, compared to previous target of $3.55 billion to $3.85 billion. Street expects revenue of $3.69 billion for the third quarter.
TI's current outlook implies a midpoint of $0.69 per share, and $3.70 billion for the third quarter.
Last month, Intel Corp. (INTC) lowered its outlook for third-quarter revenue, citing weaker than expected demand for personal computers in mature markets.
Most of the companies in the technology sector, including Intel, TI, Microsoft Corp. (MSFT), IBM Corp. (IBM), and Apple Inc. (AAPL), have reported strong earnings in the recent quarter, buoyed by the uptick in the global economy and a rebound in demand.
In mid-July, Intel reported that it swung to a $2.9 billion second-quarter profit, helped by higher revenue, sharply improved margins and the absence of a hefty charge that it took in the prior year quarter as a result of a fine imposed by the European Commission.
For the recent second quarter, TI reported that its profit more than doubled from last year, driven mainly by the strengthening demand in worldwide chip market on 3G and other electronic equipment sales.
However, the recent forecasts provided by the technocrats indicate that the strong rebound of the sector has started weakening. Prolonged weakness in Europe is also said to be a main reason for the waning sales momentum that has picked up considerably following the dilution of the global economic recession.
TI closed Thursday's regular trading session at $23.84, up 16 cents on a volume of 13.14 million shares. In the after-hours, the share lost 39 cents or 1.64%.
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