Texas Instruments Projects Higher than Expected Earnings & Revenue for Second Quarter

Texas Instruments (News - Alert) today revised its quarterly earnings and revenue estimates that placed the numbers at the higher end of previous projections.

The chip manufacturer expects its second quarter 2010 revenue to be between $3.45 billion and $3.59 billion, compared with the prior range of $3.31 and $3.59 billion. It expects earnings per share to fall between 60 cents and 64 cents, compared with the prior range of 56 cents and 64 cents.

The company's second quarter ends on June 30.

In April, 2010 Texas Instruments announced a first-quarter revenue of $3.21 billion, net income of $658 million and earnings per share of 52 cents. Company officials in April said that Texas Instruments invested in new manufacturing capacity for both wafer fabs and assembly/test facilities during the economic downturn in 2009.

"The strategic investments we've made over the years are delivering strong growth and market share gains. This was the fourth quarter of excellent sequential increases, with the combined revenue of our Analog and Embedded Processing businesses setting a new record level,' Rich Templeton, Texas Instruments chairman, president and CEO, said in April about first quarter performance.

He added that as of April momentum continued into the second quarter as demand for the company's products remained strong, and said it adds more manufacturing capacity.

"Production output is at an all-time high, and capacity is increasing each quarter in 2010 as we add 200-millimeter equipment purchased last year and as we ramp the industry's first 300-millimeter Analog facility, from which we will start shipments in the fourth quarter,' Templeton said in April.

Analysts from Zacks Equity Research said that Texas Instruments had an issue with backlog, and although more capacity was coming online, very strong demand was responsible for lead times continuing to stretch out beyond 12 weeks. Increased spending on capital equipment and the building up of finished goods inventory, was helping Texas Instruments address the supply issues, according to Zacks.

In other company news, Gemalto (News - Alert), a French provider of digital security solutions, recently announced  collaboration with Texas Instruments to enable Gemalto Mobile Financial Services on TI's OMAP platform and M-Shield security technology for mobile devices.