Texas Instruments Raises Its Q3 Financial Outlook

Texas Instruments raised its financial outlook for the third quarter Thursday, citing strong semiconductor sales and growing orders.

The Dallas-based electronics giant also announced a new line of products, named DaVinci, in its growing digital-video offerings. DaVinci packages onto a single chip the necessary processors, software and development tools for manufacturers to use in digital cameras, media players, TV set-top boxes and video security systems, among others.

The company's shares (ticker: TXN) rose 45 cents, or 1.4 percent, to $33.75 in trading Thursday and were up a similar amount in after-hours trading. TI's shares are up 36 percent this year and 79 percent in the past 12 months, as the semiconductor industry has recovered and TI's chips for consumer electronics, including cellphones, have sold well.

TI spokesman Ron Slaymaker said revenue in the third quarter, which ends Sept. 30, should be between $3.48 billion and $3.62 billion. That's up from the company's previous guidance of $3.29 billion to $3.56 billion.

Slaymaker also said earnings per share in the quarter should be 36 cents to 38 cents, compared with previous guidance of 31 cents to 35 cents a share. Those figures include an $80 million expense, or about 3 cents a share, that TI expects to record for employee stock options.

In a conference call with investment analysts, Slaymaker said inventory supplies are "under control, and demand remains steady." The company's utilization rate of its manufacturing capacity, he said, was up from the previous quarter, boosting profit margins.

The company also reduced its inventory of digital-light processors -- a chip used in high-definition televisions and projectors and a worry earlier in the year -- and average profit margins on the costly devices are up, Slaymaker said.

(c) 2005 Associated Press