YOU ARE AT:Archived ArticlesTI sees slower growth, Qualcomm bullish on 3G

TI sees slower growth, Qualcomm bullish on 3G

Texas Instruments Inc. last week reported modest gains in the fourth quarter-revenue up 4 percent, profit up 2 percent from the year-ago quarter-but said it will cut 500 jobs to reduce costs as it hunkers down for a period of weak demand by the mobile-phone industry. But Qualcomm Inc.’s outlook is a bit more positive, based on the industry’s increasing shift to W-CDMA technology.
TI is overall the leading supplier in semiconductor sales for mobile phones. Five hundred jobs represent about 1.6 percent of TI’s workforce of 31,000 employees.
TI’s fourth-quarter revenue reached $3.46 billion and annual revenue reached nearly $14.3 billion, up from 2005’s $12.3 billion. Net income for the quarter totaled $668 million, up from $655 million in the year-ago quarter. Annual net income reached $4.3 billion, nearly double the prior year’s $2.3 billion.
Rich Templeton, TI’s CEO, said that growth in the wireless handset market had come from low-tier products in emerging markets rather than the higher-priced products in mature markets, which are cooling-a point confirmed by handset makers’ earnings and by market analysts.

Qualcomm revenue up 16%
In contrast, Qualcomm reported last week that not only were revenue and net income up, if not dramatically, prospects were bright. Revenue for the fourth quarter surpassed $2 billion, up 16 percent from the year-ago quarter, and net income reached $648 million, a more modest rise of 5 percent from the year-ago quarter.
Qualcomm reaffirmed its 2007 outlook, with first-quarter revenue forecast at $2 billion to $2.1 billion, the low end of a forecast by analysts polled by Thomson Financial Network. But the positive outlook for W-CDMA chip sales, particularly to Motorola Inc., which recently signed on as a 3G-chip customer, had Ittai Kidron of CIBC World Markets, confirming his positive outlook for the chip supplier.
“We see (Qualcomm) shipments climbing once Motorola incorporates Qualcomm as a 3G chipset supplier,” Kidron wrote in an investor’s note. The company makes a market in Qualcomm securities.

ABOUT AUTHOR