Earnings: Texas Instruments | Wells Fargo, US Bancorp | Yahoo | IBM | Motorola | JandJ | Dow Jones | Merrill Lynch | Mattel | UnitedHealth

Texas Instruments Beats Estimates on Semiconductors

SAN FRANCISCO (Reuters) - Texas Instruments Inc. (TXN ) posted a quarterly profit Tuesday that topped Wall Street estimates, fueled by strong demand for its semiconductors used in cellphones. Its shares rose 3.2 percent.

Chief Executive Rich Templeton said demand was strong and he expected it to continue, citing particularly good growth in digital signal processors and analog semiconductors, which rose 32 percent and 24 percent, respectively, from a year ago.

Texas Instruments, which makes also makes chips for everything from flat-panel televisions to calculators, said its first-quarter net income rose to $585 million, or 36 cents a share, from $411 million, or 24 cents a share a year earlier.

The just-reported quarter includes 4 cents per share in stock-based compensation expense.

Revenue increased to $3.33 billion from $2.70 billion in the year-ago quarter.

"We think we're off to a good start to the year and have momentum behind us," said Kevin March, Texas Instruments chief financial officer, in an interview. "It was a strong quarter and it got stronger each month we went through it."

Analysts had expected earnings of 33 cents a share on revenue of $3.29 billion, according to Reuters Estimates. TI last month forecast a profit from continuing operations of 31 cents to 33 cents a share, on revenue of $3.22 billion to $3.35 billion.

"It was a solid number, really, across the board and a little revenue upside and strong gross margin," said Cody Acree, an analyst at Stifel Nicolaus.

For the current second quarter, TI said it expects earnings per share from continuing operations of 38 cents per share to 43 cents per share, on revenue of $3.46 billion to $3.75 billion. TI's per-share forecast includes about 4 cents for stock-based compensation expense.

Analysts currently expect TI to have a profit of 37 cents per share, on average, on revenue of $3.47 billion, according to Reuters Estimates.

TI has faced inventory shortages in recent months, raising concern among some investors that strong demand would outstrip its ability to keep up and deliver higher profits.

Inventory in the first quarter was $1.25 billion, an increase of $61 million from the prior period as TI built inventory from the lower-than-desired levels of the fourth quarter to meet customer demand.

"Margins and revenue were better than feared," said Charlie Glavin, an analyst at Needham & Co. of the results. "Inventories did go up as we expected but they basically are not far off from where they were last year," said Glavin.

Texas Instruments shares have risen 48 percent in the last year based on Tuesday's closing price due to strength in its wireless business. In the same period shares of wireless chip rival Qualcomm Inc have risen 58 percent.

Shares of Texas Instruments rose $1.32, or 4 percent, to close at $34.00 per share on the New York Stock Exchange ahead of the earnings report. In extended trade, the stock climbed to $35.09.

Wells Fargo, US Bancorp Have Record Profits

NEW YORK (Reuters) - Wells Fargo & Co. (WFC) and U.S. Bancorp (USB), the No. 5 and No. 6 U.S. banks, Tuesday posted record first-quarter profits, helped by growth in lending and a decline in bad loans.

Net income rose 9 percent at Wells Fargo and 8 percent at U.S. Bancorp. Other large banks posted mixed results, with profit falling at two Ohio-based banks, National City Corp. and Fifth Third Bancorp Inc., and rising at a third, KeyCorp.

WELLS FARGO, U.S. BANCORP

Net income for San Francisco-based Wells Fargo rose to $2.02 billion, or $1.19 per share, from $1.86 billion, or $1.08, a year earlier. Revenue rose 6 percent to $8.56 billion, and excluding mortgages jumped 17 percent.

The results fell short of Wall Street forecasts. Analysts polled by Reuters Estimates on average forecast profit of $1.20 per share on revenue of $8.62 billion.

Yahoo Net Drops on Options but Meets Consensus

SAN FRANCISCO (Reuters) - Yahoo Inc. (YHOO) Tuesday said quarterly net profit declined amid higher stock option expenses, as strength in online display advertising was partly offset by market share losses in paid search ads.

The world's largest Internet media company said net income for the first quarter fell to $160 million, or 11 cents per diluted share, from $204.6 million, or 14 cents per diluted share, a year earlier.

Excluding one-time items tied to the impact of stock-based compensation costs, Yahoo reported adjusted net income of $231 million, or 15 cents per diluted share, in the latest quarter.

The Wall Street consensus estimate, excluding one-time items, was 16 cents per share, according to Reuters Estimates, within a wide range of 11 cents to 19 cents. Including items, analysts predicted a consensus net profit of 11 cents a share.

IBM Profit Gains Amid Lower Costs, Chip Sales

SAN FRANCISCO (Reuters) - IBM (IBM), the world's biggest computer-services company, Tuesday said quarterly profit rose amid lower costs and strong sales of advanced microprocessors for video game machines.

Net income advanced to $1.71 billion, or $1.08 per share, from $1.4 billion, or 84 cents per share, a year earlier, International Business Machines Corp. of Armonk, New York, said in a statement. Revenue decreased to $20.7 billion from $22.9 billion.

Analysts, on average, had forecast net income of $1.05 per share, according to Reuters Estimates. Revenue was seen at $20.6 billion.

IBM shares edged up 9 cents, or 0.1 percent, in after-hours trade following the earnings report.

IBM said revenue from its global services business, the company's largest unit, fell 1.2 percent. It signed services contracts worth $11.4 billion, compared with $11.5 billion in the quarter ended Dec. 31.

IBM shares, down 3 percent in the past 12 months, trade at about 14 times estimated 2006 earnings per share, a discount to competitor Dell Inc.'s 18 multiple and Hewlett-Packard Co.'s 17.

Motorola Posts Lower Quarterly Net Profit

NEW YORK (Reuters) - Motorola Inc. (MOT), the world's second-biggest cellphone maker, Tuesday said its first-quarter profit fell slightly due to stock option expenses but revenue rose on strong mobile phone sales.

The Schaumburg, Illinois-based company posted net earnings of $686 million, or 27 cents a share, compared with $692 million, or 28 cents a share, in the year-ago quarter. The latest quarter includes 2 cents a share in stock option expenses.

Analysts on average had expected earnings of 27 cents a share, including stock option expenses, according to Reuters Estimates.

Revenue rose 23 percent to $10.01 billion from $8.16 billion. Analysts on average had expected revenue of $9.54 billion.

Motorola's stock has risen by about 60 percent in the last year, boosted by the popularity of devices such as its Razr phone. Bigger rival Nokia has seen its U.S. shares rise more than 40 percent in the same timeframe.

Johnson and Johnson Posts Rise In Earnings

CHICAGO (Reuters) - Johnson and Johnson (JNJ) Tuesday said first-quarter earnings rose 16 percent, helped by a break-up fee from its failed pact with Guidant Corp. (GDT) and higher sales of medical devices that offset declining sales of prescription drugs.

The diversified health-care company said it earned $3.3 billion, or $1.10 per share, compared with $2.8 billion, or 94 cents per share, a year earlier.

Excluding special items, the New Brunswick, New Jersey-based company earned 99 cents per share. According to Reuters Estimates, analysts on average expected 98 cents, including stock option expensing.

Sales rose 1.2 percent to $13 billion.

Results were hurt by plunging sales of J&J's Duragesic pain patch, as well as lower sales of Ultracet, an analgesic, and Sporanox, an antifungal. All were hurt by generic competition.

J&J said the first-quarter results were about as expected. It previously said it expected full-year 2006 revenue to grow 6 percent to 8 percent, with substantially lower growth in the first quarter due to the timing of patent expirations and other events that took place in 2005.

So far this year, J&J shares have fallen 6.4 percent, compared with a decline of 1.4 percent in the American Stock Exchange Pharmaceutical Index.

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Dow Jones Sees Higher Earnings

NEW YORK - (AP) - Dow Jones & Co., (DJ) publisher of The Wall Street Journal, reported sharply higher first-quarter earnings Tuesday on an accounting gain relating to litigation over its former Telerate data delivery service.

The New York-based company reported income of $61.5 million or 74 cents per share, up fro $8.2 million or 10 cents per share in the same period a year ago.

The company, which also published Barron's, Dow Jones Newswires and a group of community newspapers, said the results included a one-time gain of 60 cents per share as it settled litigation with a financial data provider for less than it had taken a reserve.

Without that gain or other one-time items in both periods, Dow Jones earned $11.4 million or 14 cents per share, compared with $9.5 million or 11 cents per share in the year-ago period. Analysts surveyed by Thomson Financial had been expecting 15 cents per share.

Revenues rose 9.7 percent to $452.2 million from $412.1 million.

Dow Jones said it expects to post second-quarter earnings before special items in the mid-30 cents per share, compared to the 34 cents per share it earned in the year-ago period. Analysts had been looking for 38 cents.

The Wall Street Journal's print edition posted a 17.9 percent gain in revenues in the quarter, including its new Weekend Edition on Saturdays, but overall the company's consumer media unit, which includes Barron's and MarketWatch in addition to the Journal, posted a loss of $2.4 million due to losses from the Saturday edition.

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Merrill Lynch Posts Profit Fall On Charge

NEW YORK (Reuters) - Merrill Lynch & Co. Inc. (MER) said on Tuesday that its first-quarter profit dropped after the largest U.S. brokerage took a $1.2 billion charge related to stock-based compensation.

The New York-based company reported net income of $475 million, or 44 cents a share, down from $1.21 billion, or $1.21 a share, in the same quarter a year earlier.

Analysts polled by Reuters Estimates on average expected earnings of 35 cents a share before exceptional items, but including the $1.2 billion charge.

The company's revenue rose to $7.96 billion, up 28 percent from a year earlier. Analysts had expected revenue of $7.4 billion.

Merrill earlier this month said it was changing certain compensation policies after new U.S. accounting rules prompted a broad review of how it pays its employees. Merrill took about an $850 million charge for those changes to compensation, combined with $350 million for the effect of the new accounting rules.

Merrill Lynch's profit has been climbing steadily since the second quarter of 2005, helped by rising investment banking activity and a rebound in retail brokerage revenue.

Merrill's revenue from high net worth and retail brokerage clients rose 13 percent to $2.9 billion in the first quarter, while its revenue from merger advisory rose 61 percent to $257 million.

Merrill's higher profits have lifted its shares to record levels, but other brokerages' shares have performed even better over the past year, as investors favor investment banks that trade more of their own funds and generate more revenue from advising companies on mergers.

Over the last year, Merrill's shares have risen nearly 50 percent, while the Amex Securities Broker Dealer Index, which measures the performance of the sector as a whole, has risen nearly 70 percent.

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Mattel Posts First-Quarter Loss

NEW YORK (Reuters) - Mattel Inc. (MAT), the largest U.S. toymaker, on Tuesday reported a first-quarter operating loss, hurt by charges and a worldwide decline in Barbie sales, and said it expects the year to remain challenging.

The toymaker said it implemented price increases, effective in the second quarter for the United States.

Mattel, which has been trying to stem falling Barbie sales as girls are lured to rival Bratz dolls, reported first-quarter earnings of $30.2 million, or 8 cents a per share, compared with earnings of $6.5 million, or 2 cents per share a year earlier.

The first-quarter results include a tax benefit of 15 cents per share.

On an operating basis, Mattel reported a first-quarter loss of $32 million compared to operating income of $5.5 million. The operating results included $13 million of severance charges.

Analysts, on average, expected Mattel to break even on a per-share basis, according to Reuters Estimates.

"We expect the year to continue to be challenging and have implemented price increases effective in the second quarter for the U.S.," said Robert Eckert, Mattel's chairman and chief executive officer, in a statement.

The El Segundo, California-based toy company said sales rose 1 percent to $793.3 million, missing analyst targets of $800.4 million.

Worldwide gross sales for Barbie fell 8 percent, while Hot Wheels sales fell 3 percent.

Toy makers have been battered by challenging market conditions, as children are being lured to electronic toys at younger ages and higher commodity prices have made plastic more expensive, resulting in margin pressure.

Mattel said gross margin decreased 210 basis points of net sales.

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UnitedHealth Posts Higher Profit

NEW YORK (Reuters) - U.S. health insurer UnitedHealth Group Inc. (UNH) on Tuesday posted higher quarterly profit as it benefited from the acquisition of PacifiCare Health Systems, and increased its full-year profit forecast.

The largest U.S. health insurer by market value said first-quarter net income rose to $899 million, or 63 cents per share, from $743 million, or 55 cents, a year earlier. Last year's results were restated to account for new stock option expensing rules.

UnitedHealth posted adjusted earnings of 68 cents per share.

UnitedHealth said its first-quarter results compare with its previous forecast for net earnings of 58 cents per share and adjusted earnings of 65 cents per share.

The company posted total revenues of $17.59 billion in the quarter, up about 58 percent. Premiums rose 60 percent to $16.21 billion.

UnitedHealth increased its full-year forecast for net earnings to a range of $2.88 per share to $2.92 per share, or growth of 22 percent to 24 percent. In January, UnitedHealth forecast 2006 earnings per share of between $2.85 to $2.90.

UnitedHealth in December completed its $9.2 billion acquisition of PacifiCare.

The company said it now provides services to about 70 million U.S. health consumers, an increase of 27 percent over the prior year.

Shares of the Minneapolis-based company closed at $51.67 on Monday. The stock has fallen about 17 percent so far this year, compared to about a 2 percent dip in the Morgan Stanley Healthcare Payor index.

UnitedHealth shares trade at about 18 times estimated 2006 earnings, more expensive than rivals WellPoint Inc. (WLP) and Aetna Inc. (AET)

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