SAN FRANCISCO—Chip maker Texas Instruments Inc. said Monday (July 25) that two semiconductor fabs damaged in the March 11 earthquake in Japan resumed production ahead of schedule as the company reported second quarter results that beat analysts' expectations.
"In the quarter, we also resumed production ahead of schedule at our Japan factories that were damaged in the earthquake, thanks to excellent work by our teams on the ground," said Rich Templeton, TI's chairman, president and CEO, in a statement.
TI's Japanese fabs in Aizu-wakamatsu and Miho were idled in the aftermath of the quake. The Miho fab suffered substantial damage. The Aizu-wakamatsu was expected to resume production in April, but TI said at the time that the Miho fab wouldn't be back to full production until the middle of this month.
TI's Miho fab was believed to be the last fab still idled from the March 11 earthquake and tsunami, with the exception of a Freescale Semiconductor Inc. fab in Sendai, Japan, (the closest fab to the quake's epicenter) which the Freescale decided not to reopen.
TI also announced that its pending $6.5 billion acquisition of National Semiconductor Corp. has cleared all antitrust reviews with the exception of China, which is underway. The company said it continues to expect the transaction to close before the end of the year.
"We look forward to welcoming the people of National Semiconductor and to expanding the portfolio of unique products we can offer our Analog customers," Templeton said.
TI (Dallas) reported second quarter sales of $3.46 billion, up 2 percent from the previous quarter and down 1 percent from the second quarter of 2010. The company reported a net income of $672 million, or 56 cents per share up 1 percent from the previous quarter but down 13 percent compared with the year-ago quarter.
Consensus analysts' expectations had called for TI to report sales of $3.44 billion and earnings of 53 cents per share, according to Yahoo Finance.
Sequential revenue growth was driven by 12 percent growth in embedded processing products and 3 percent growth in analog products, TI said. The company believes it gained market share in both segments, according to Templeton.
Templeton said TI expects modest sequential growth in the third quarter, but that a combination of factors make the outlook for the quarter less clear than usual.
Kevin March, TI's senior vice president and chief financial officer, said the company expects revenue for the third quarter of between $3.4 billion and $3.7 billion, a sequential change of down 2 percent to up 7 percent.
"Management cited macroeconomic uncertainty in computing and consumer as driving more conservative guidance than typical," said Craig Berger, an analyst with FBR Capital Markets, in a report circulated Thursday. "We think management gave conservative guidance that TI may ultimately beat in three months, perhaps giving investors confidence that this is the 'bottom' for chip stocks and fundamentals."
Berger maintained FBR's "outperform" rating on TI's stock, but cut its target price on TI's stock to $36 from $39.
Bobby Burleson, an analyst with Canaccord Genuity, said in a separate report that analog IC sales are tracking poorly so far in the third quarter for PCs and consumer electronics, a potential issue for TI. "We believe sell-through trends in Asia are tracking well below normal seasonality early in Q3 and are likely to remain weak," Burleson said.