In a sign the market for communications chips has stabilized, if not returned
to some growth, Texas Instruments said its first quarter loss was much smaller
than anticipated and sales were starting to pick up as equipment makers restock
after a year of cutting inventories.
TI lost $38 million compared with a profit of $230 million a year ago. Sales
tumbled to $1.83 billion from $2.53 billion, but that was slightly higher than
earlier expectations on Wall Street. And second quarter sales are now expected
to further increase to $2.1 billion. "I'd say as an example, our wireless
customers themselves are all predicting they will have unit growth in their
business this year," said chief financial officer Bill Aylesworth said in
an interview. "We think we have enough visibility for the second quarter.
An estimated 420 million cellular handsets are expected to be shipped this
year, up from about 380 million last year. "We have turned the corner
toward growth," said TI CEO Tom Engibous. "TI's shipments, affected by
liquidation of excess inventory in 2001, are accelerating as they catch up to
the rate of our customers' shipments. Growth will be driven by improvements in
our customers' end-equipment markets. The key driver for improvement will be a
stronger economy, which will lead to more normal levels of global corporate
spending."