Texas Instruments Inc. (TXN), the world's largest maker of chips for cell phones, Tuesday reported a 4 percent decline in fourth-quarter profit, but strong sales of chips for mobile handsets and televisions boosted earnings above its forecast.
The Dallas-based company said an unabated oversupply of some products in the hands of distributors hindered results, and predicted a decline in sales for the current quarter.
Texas Instruments, which counts Finland's Nokia (NOK) as a top customer, reported a net profit of $490 million, or 28 cents per share, down from a year-ea12 million, or 29 cents per share. Revenue rose to $3.15 billion from $2.77 billion a year earlier.
The results topped a December forecast that called for earnings of 25 cents to 27 cents a share on sales of $3.02 billion to $3.14 billion.
"There is no disputing the numbers were good and they were good in the right places," said Barry Randall, portfolio manager of the $100 million First American Technology Fund (search), which owns Texas Instruments stock.
TI also said its board had authorized $2 billion in stock buybacks.
For the current quarter, Texas Instruments forecast a decline in sales to $2.9 billion to $3.14 billion, with earnings in the range of 22 cents to 26 cents a share. The forecast was in line with average analyst expectations of earnings of 24 cents per share and sales of $3.09 billion, according to Reuters Estimates.
Texas Instruments shares were halted ahead of the earnings release. At 4:00 p.m. on the New York Stock Exchange, the shares were up 29 cents, or 1.4 percent, at $21.12.