DALLAS (dpa-AFX) - Texas Instruments Inc. (TXN), the world's largest maker of analog chips, said Wednesday after the markets closed that its second quarter profit rose 2% from last year, as better cost control helped offset a 2% decrease in revenue.
The company's quarterly earnings per share also came in line with analysts' expectations, but its quarterly revenue fell shy of analysts' forecast. At the same time, the company gave a disappointing outlook for the current quarter.
'Revenue declined 2 percent year over year, inclusive of notably weak demand in communications equipment and continued strong demand in automotive,' said Rich Templeton, TI's chairman, president and CEO. 'While strength in demand varies by end markets, our market in total is expected to be weaker year over year in the third quarter than it was in the second.'
TI shares are currently gaining 0.41% in after hours trading after closing the day's regular trading session at $49.30, down 93 cents or 1.85%. The shares trade in a 52-week range of $41.47 to $59.99.
Texas Instruments makes chips used in phones, telecommunications equipments and calculators, making the company's earnings an indicator of demand across the economy.
For the second quarter ended June 30, 2014, the Dallas, Texas-based company reported net income of $696 million or $0.65 per share, compared to $683 million or $0.62 per share for the year-ago quarter.
On average, 32 analysts polled by Thomson Reuters expected the company to earn $0.65 per share for the second quarter.
Gross margin for the quarter improved to 58.2% from 57.1% a year ago, while operating margin increased to 31.3% from 29.8% last year.
Revenue for the second quarter fell 2% to $3.23 billion from $3.29 billion in the same quarter last year. Thirty-one analysts had a consensus revenue estimate of $3.26 billion for the second quarter.
Analog segment revenue for the quarter increased 3% to $2.0 billion, while embedded processing segment revenue fell 2% to $690 million. Other revenue fell 17% to $493 million.
Looking forward to the third quarter, the company forecasts revenue of $3.15 billion to $3.41 billion and earnings of $0.62 to $0.72 per share. Analysts currently expect the company to earn $0.75 per share on revenue of $3.47 billion for the third quarter.
Copyright RTT News/dpa-AFX
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