Tax credit lifts Texas Instruments' quarterly profit
Cell phone chipmaker posts a better-than-expected fourth-quarter profit thanks to a tax credit, and shares rose 2 percent in after-hours trading.
But its current-quarter forecast disappointed as the company said growth was skewed toward low-priced phones.
It said its fourth-quarter profit was $668 million, or 45 cents a share, compared with $655 million, or 40 cents a share, in the year-ago quarter.
Shares in TI, which makes chips for everything from calculators to the latest high-tech televisions, rose to $29.18 in after-market trading from its close of $28.59 on the New York Stock Exchange.
TI said its profit was bolstered by a 5 cent per share federal research tax credit and a 1 cent gain from new patent license agreements that replaced previously expired pacts.
Revenue rose to $3.46 billion from $3.32 billion.
In December, TI cut its forecast for earnings per share from continuing operations to a range of 37 cents to 40 cents, and cut its revenue target to a range of $3.35 billion to $3.50 billion citing weak demand.
The company said its challenges would continue in the first quarter because customers want lower levels of inventory and growth in the wireless market is skewed to low-priced cell phones instead of higher-priced, full-featured phones.
Texas Instruments said it expects first-quarter earnings per share of 28 cents to 34 cents on revenue of $2.95 billion to $3.2 billion.
On average analysts had expected first-quarter earnings of 35 cents a share on revenue of $3.3 billion.
Its shares have fallen almost 16 percent in the last four months on investor concern that wireless industry growth is increasingly dependent on the sale of cheaper phones in emerging markets.