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July 21, 2009
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TI reports strong second quarter, expects continued growth off a smaller base
On July 20, 2009, Texas Instruments (TXN) reported results for the second quarter of fiscal year 2009 ending June 2009. Both the top and bottom lines were well over initial consensus estimates.
Management stated that channel inventories declined 10% in the second quarter, and customer lead times stretched out on some products. This does not come as a surprise, since a few of the other companies generating significant sales from communications customers are seeing similar conditions:
Xilinx (XLNX), for example, experienced supply constraints, and was unable to service demand. Cypress (CY) management was of the opinion that restocking activity had not yet impacted the company’s business. Altera’s (ALTR) reported flattish inventory at distributors and extended lead times. The company expects lead times to return to normal levels over the next two years.
TI generated revenue of $2.46 billion in the third quarter, which was up a whopping 17.8% sequentially. However, revenue declined 26.7% on a year-over-year basis, the third straight quarter of double digit decline.
This supports our view that the revenue decline in 2009 will be sharper than in 2008. The main reason for this is that the sequential revenue increases will be coming off a much smaller base.
Read the full analyst report on "TXN"
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