Texas Instruments Profits Down 13% on Japanese Earthquake Costs

Published on: 26th Jul 2011

­Texas Instruments (TI) today announced second-quarter revenue that was down by 1% at $3.46 billion and a net income that was down by 13% at $672 million.

TI's operating profit was negatively impacted by about $50 million due to costs associated with the March earthquake in Japan. These costs were net of proceeds from ongoing insurance claims.

Operating profit declined from a year ago primarily due to lower gross profit, which declined as a result of the earthquake-related costs, lower factory utilization and lower revenue.

"We are pleased with the continued success of the TI portfolio in Analog and Embedded Processing. Sequential revenue growth was driven by Embedded Processing up 12 percent and Analog up 3 percent, and we believe we again gained market share in both segments," said Rich Templeton, TI's chairman, president and chief executive officer. "In the quarter, we also resumed production ahead of schedule at our Japan factories that were damaged in the earthquake, thanks to excellent work by our teams on the ground."

"We expect growth in the third quarter, but because of mixed macroeconomic and market signals we are prepared for a broader-than-normal range of growth possibilities. We note that production at some computing and consumer manufacturers appears lukewarm even though we're heading into the back-to-school and holiday seasons. At the same time, Asian distributor resales have been strong, demand from our Japanese customers is increasing and our backlog increased in the second quarter. We've planned for modest sequential growth in the third quarter, yet are prepared to support higher demand if it materializes."

TI's pending acquisition of National Semiconductor has cleared all antitrust reviews with the exception of China, which is underway. The company continues to expect the transaction to close before the end of the year.  To fund its pending acquisition of National Semiconductor, TI issued $3.5 billion of debt in the second quarter and $1.2 billion of commercial paper in July.

 

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