Texas Instruments has exceeded analysts expectations this quarter.
January 24, 2012- Signs appear to show the components market may be bottoming out. Texas Instruments released quarterly earnings on Monday that beat Wall Street analysts’ expectations. Its stock rose nearly 5% in extended trading.
Net income dropped by 68% to nearly $298 million or $0.25 per share. The prior year’s fourth quarter net income was $942 million or $0.78 per share. Nevertheless, the drop was not as much as what Wall Street analysts had predicted. Sales fell by 3% to more than $3.42 billion. Analysts had estimated that profit would be only 23 cents per share and sales would not exceed $3.25 billion.
Texas Instruments makes more analog chips than any other company in the world does. These chips are semiconductors that are important components in refrigerators to satellites. Because of that, its earnings reflect a broad indicator of what the demand is throughout the economy.
The company is not estimating a surge in sales however; the recent numbers may reflect the industry is close to ending its slump in sales. The company also announced the closing of two plants that will save it nearly $100 million per year.
One Wall Street analyst said, “Inventories at this time are low and customers have started to order once again.” He recommended buying the company’s stock. The stock closed Monday at $33.19.
