DALLAS --Texas Instruments Inc. today reported a net loss of $197 million on revenues of $2.0 billion in the second quarter. TI's revenues dropped 19% from the first quarter, while orders declined 20% sequentially to $1.7 billion.
"Make no mistake, this is a severe downturn, but we now see some signs of stabilization," said Tom Engibous, chairman, president and CEO. "The rate of sequential decline for semiconductor orders has slowed, and it appears our semiconductor revenue is nearing a bottom.
"Wireless orders increased, reflecting our customers' continued progress in reducing excess inventory as well as the impact of new programs," he said. "The downturn isn't over, but we are beginning to shift our focus to recovery and growth."
TI is forecasting a revenue decline of 10-to-15% in the third quarter because some of its semiconductor customers continue to reduce inventories. With the expected sales decline, TI said it expects to report a loss in the third quarter. The company estimated a pro forma loss of a "few cents" per share in Q3 vs. pro forma earnings of $0.03 per share in Q2.
The Dallas company's Q2 net loss of $197 million includes special charges of $252 million, including $214 million for severance costs worldwide and $35 million for shutting down three U.S. plants.
TI said its semiconductor revenues sequentially dropped 23.9% in the second quarter to $1.7 billion vs. $2.2 billion in Q1. TI's chip sales were 34% lower than $2.5 billion in Q2 of 2000. The company said its semiconductor business has an operating loss of $37 million in the second quarter compared to an operating profit of $634 million in the period last year.
Analog chip revenues dropped 24% sequentially in the just-ended period, while digital signal processor (DSP) sales fell 17% from the first quarter, said TI. Analog and DSP revenues represented 65% of TI's chip sales.
TI's semiconductor orders declined 12% sequentially to $1.3 billion in Q2 from the first quarter of this year.
The company said it continues to budget $1.8 billion in capital spending in 2001, with about two-thirds of those expenditures already made in the first half of this year.