Texas Instruments Raises Q4 Earnings Outlook (TXN)

Texas Instruments Inc. (NASDAQ:  TXN) raised a tad its outlook on fiscal fourth-quarter profit (excluding  huge restructuring charge) as company looks to slash its expenses owing to global macroeconomic uncertainty; nevertheless, it narrowed its revenue guidance putting a question mark on its long term growth prospects.

Earlier on Thursday, the Wall Street investors took it as a positive indication; however the mood turned somber quickly after company’s investor relations executive Ron Slaymaker revealed during the conference call that slight improvement in profit was only due to cost-cutting measures.

The Dallas based Texas Instruments said that it now expects earnings to fall in the range of 5 cents to 9 cents a share on GAAP basis (that is after including restructuring charges of 21 cents a share).

The fourth quarter charges of 21 cents a share is linked to restructuring expenses. Earlier in November, the Company had said that it will slash 1,700 jobs as it looks to move out from the market of application chips used in cell-phones.

Earnings on adjusted basis/ non-GAAP basis (earnings excluding the impact of restructuring charges) are expected at 28 cents up from original estimation of 27 cents a share.

The company raised its upper range of the expected revenue and lowered its higher range of the expected revenue, from its earlier estimate.

Revenue for the fiscal fourth quarter, is now expected to come in the range of $2.89 billion to $3.01 billion against its previous forecast of $2.83 billion to $3.07 billion.

Analysts polled by Thomson Reuters, on average, were expecting revenue of $2.96 billion which is higher than company’s midpoint revenue expectation of $2.95 billion.

Commenting over company’s latest fourth quarter guidance, Charter Equity Research analyst, Ed Snyder said that at this juncture it was difficult to predict where the company is heading.

Speaking to Reuters, Snyder said, “I can’t see how you could read a recovery into what TI said,” emphasizing that TI provided no indications on whether the demand was going to get better or worse, which is expected to make stock wobbly.

“This isn’t going to give comfort to either the bulls or the bears because there’s no clear indication of a sustained long term trend up or down,” added Snyder.