TI cuts 500 jobs amid mixed Q3 results

OCTOBER 30--Preparing for a lackluster holiday season, Texas Instruments Inc. (TI; Dallas, TX; www.ti.com) has announced that it has cut 500 jobs amid a lackluster forecast for the fourth quarter of 2002.

Oct 30th, 2002

OCTOBER 30--Preparing for a lackluster holiday season, Texas Instruments Inc. (TI; Dallas, TX; www.ti.com) has announced that it has cut 500 jobs amid a lackluster forecast for the fourth quarter of 2002. TI also reported sales of $2.248 billion in its third quarter ended Sept. 30, up 4% from $2.162 billion sequentially and 22% from $1.849 billion in the like period a year ago.

It reported a net of $188 million, or $0.11 a share, in the quarter, compared to a loss of $117 million, or $0.07 a share, in the like period a year ago. In the previous quarter, the Dallas-based chip maker reported a net of $95 million, or $0.05 a share.

Gross profit declined sequentially, primarily due to lower royalties and reduced factory utilization levels late in the third quarter. Semiconductor orders of $1.773 billion were down 5% sequentially and increased 36% from the year-ago period.

"In the quarter, TI's DSP and analog both delivered more than 30% revenue growth compared with a year ago, and we believe both grew faster than their respective markets. Combined, they comprise more than 70% of TI's total semiconductor revenue," said Tom Engibous, TI's chairman, president, and CEO. "Semiconductor revenue was up across a broad range of products. Wireless especially remained strong, delivering its fifth consecutive quarter of sequential growth as consumers continue to embrace new, advanced cell phones with color screens, and as TI chipsets further penetrate OEM and ODM customers," he added.

Regarding the near-term outlook, TI presented a mixed bag. "Except for wireless, orders were generally weaker in the third quarter compared with the second quarter, leading TI to expect revenue to decline sequentially in the fourth quarter," he said. "Given the limited visibility in the current environment, we believe it is prudent to plan cautiously yet retain the flexibility to respond quickly should customer demand increase. TI is aggressively tightening its control of expenses and aligning resources with market demand, including the reduction of about 500 jobs," he said.

For the fourth quarter of 2002, compared with the third quarter, TI expects that total revenue to decline about 10%, while semiconductor revenue will decline about 5%.

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