Texas Instruments posts loss

SAN FRANCISCO: Texas Instruments Inc. the top maker of semiconductors for cell phones, has posted a fourth-quarter net loss after a large investment write-down, but otherwise beat expectations with strong sales of chips for wireless handsets.

The company reported a net loss for the quarter of $589 million, or 34 cents a share, compared with a loss of $116 million, or 7 cents a share, a year earlier. Texas Instruments said the loss was primarily due to a $638 million write-down of shares in Micron Technology Inc., which it received when it sold its memory business unit to Micron in 1998. The write-down reduced earnings by 37 cents per share, the company said.

Excluding one-time items, which also included acquisition-related cost amortization and restructuring charges related to layoffs of 500 workers, the company recorded a profit of $100 million, or 6 cents per share.

On that basis, analysts had on average forecast that the company would post a profit of 3 cents a share, in a range between 2 cents and 4 cents, on revenue of $2.08 billion, according to Thomson First Call.

"The semiconductor business did better than expected," coming in even with the third quarter rather than dropping slightly as the company expected, said Chief Financial Officer Bill Aylesworth. Sales of wireless cell phone chips rose 13 percent sequentially, while demand was also strong for chips used in cameras and power management chips used in laptops, he said. Nokia contributed 12 percent of Texas Instrument's overall revenue, Aylesworth told analysts in a conference call.

Analysts viewed the company forecast with some skepticism.

"I think that's a little optimistic given the commentary we've heard from the end markets," said Chris Danely of J.P. Morgan. "TI's results sounded very positive for the wireless business," said Bobby Burleson, an analyst with brokerage Investec in New York. "I think there is some euphoria here."

© Reuters