--Revisions temper optimistic comments from some industry
executives in recent months
--TI lowers guidance for fourth straight quarter
--Both companies cite weakness in wireless demand
(Updates with additional guidance from TI starting in the first
paragraph, fresh stock quotes)
Texas Instruments Inc. (TXN) and Altera Corp. (ALTR) on Thursday
tempered their first-quarter outlooks, citing lower-than-expected
sales to wireless customers.
The projections, which included lower profit and revenue
estimates from Texas Instruments and a narrower sales view from
Altera, offered a rebuttal to the upbeat tone struck by some
industry executives who had tentatively called for the chip
sector's trough in recent months.
For the current quarter, Texas Instruments now sees earnings
between 15 cents and 19 cents a share, including at least 10 cents
of restructuring and acquisition charges, with $2.99 billion to
$3.11 billion in revenue. The company's conservative earnings
forecast in January called for a profit between 16 cents and 24
cents a share, with $3.02 billion to $3.28 billion in revenue.
The company, which supplies electronics ranging from industrial
machinery to videogame consoles, cut its profit and revenue
forecasts three times last year due to weak demand in all of its
end markets, though Chairman and Chief Executive Rich Templeton
suggested as early as January that conditions for the company had
hit their lowest.
In the current quarter, Texas Instruments pointed to lower
demand for wireless products, a patch of the industry that often
delivered the strongest growth in recent years.
The more cautious guidance comes after the chip maker's
fourth-quarter profit fell on weaker sales and the company unveiled
plans to close two older semiconductor-manufacturing plants in
Japan and Texas over the next 18 months.
Altera, which makes programmable logic chips used in a range of
electronics and industrial equipment, now expects revenue to fall
7% to 9% from the previous quarter, which would generate sales
between $416.6 million and $425.8 million. Its downbeat view in
January projected a sequential decline of 5% to 9%.
Semiconductor companies' results have weakened in recent
quarters because of wilting demand, although some optimistic market
observers have already started anticipating the end of the
retrenchment.
Altera warned late last year that its outlook had deteriorated
across all its major vertical markets, with conditions also
weakening in every region except North America, where military
sales were lifting its top line.
On Thursday, Altera said the timing of programs in the military
market and weak demand from wireless customers forced it to temper
the higher end of its sales view.
Texas Instruments shares slipped 1.3% to $32.18 after hours on
the semiconductor company's weaker earnings revision, its fourth in
as many quarters. The stock was off 9.1% over the past year through
Thursday's close.
Altera shares were off fractionally at $37.20 after hours. The
stock is off 14% over the past year.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909;
Andrew.FitzGerald@dowjones.com