Texas Instruments Plans to Build Up Inventory as Uncertainty Looms.
Texas Instruments in April reported sales and profits on the high end of its quarterly forecasts, buoyed by customers building up inventory to protect against delays in supply stemming from the coronavirus outbreak.
Rich Templeton, Texas Instruments' chief executive officer, said on a conference call that it plans to maintain production at about the same level as the beginning of the year even as customers become more cautious. He said its spending on research and development would remain unchanged. The company also plans to push ahead with billions of dollars of investment in a new analog production plant under construction in Richardson, Texas.
Templeton said it has mostly been business as usual for Texas Instruments despite some unforeseen disruptions to its production and supply lines. He said the company has been rolling out parts to customers with short, stable lead times. Texas Instruments is taking advantage of its vast manufacturing operations to package and test its final components in-house instead of sending them out to contractors in China, Europe, or Southeast Asia.
Texas Instruments said sales slipped 7% to $3.33 billion in the first quarter of 2020, on the high end of its guidance of $3.12 billion to $3.38 billion. Profits dipped slightly from $1.22 billion or $1.26 per share a year ago to $1.17 billion or $1.24 a share. Texas Instruments' core analog semiconductor business slipped by only around 2% over the last year, while chips sold to customers in embedded plunged 18% from a year ago, the company said.
Texas Instruments, which tends to report results ahead of other chip manufacturers, said that it widened the range of its revenue forecast to reflect the worsening uncertainty and deepening panic in the population. Profits are projected to be between $0.64 and $1.04 a share in the second quarter of 2020, down from $1.36 a share a year ago. It also predicts revenue in the range of $2.61 billion to $3.19 billion, dipping from $3.67 billion a year ago.
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|Title Annotation:||INDUSTRY REPORT|
|Date:||May 1, 2020|
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