Chip maker Texas Instruments Inc. said Monday that its fourth-quarter earnings and revenue will fall significantly below earlier forecasts, as the global market for semiconductors continues to weaken.
The Dallas-based company said it now expects to earn 10 to 16 cents per share, down from the prior forecast of 30 to 36 cents per share. Analysts polled by Thomson Reuters were expecting a profit of 31 cents per share, on average.
TI expects revenue to come in between $2.3 billion and $2.5 billion, down from its prior expectation of $2.83 billion and $3.07 billion. Analysts were forecasting $2.91 billion.
Analysts were expecting TI to report a bleak outlook in the fourth quarter, as the chip market has gotten weaker since the company's last guidance.
Notably, Nokia Corp., the world's largest maker of cell phones and a large TI customer, has cut its estimate for next year's handset industry production twice since then.
In October, Chief Executive Rich Templeton warned that order trends have been weak in the past few months.
The company also said in October it would cut 650 people from its unit that makes chips for cell phones to save over $200 million per year. TI was in talks to sell part of that unit, which has suffered due to a sales drop at Motorola Inc., one of its main clients.
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Shares of TI were up 26 cents to $14.82 on Monday. The company disclosed its forecast after the market's close.
In an effort to help reduce employment costs, the company's early retirement program was offered Monday to 2,600 eligible Texas Instruments employees in the United States. There was no word on how many employees will take the offer, which is good until Jan. 23, 2009.
There are 30,000 T.I. employees worldwide:
14,800 in The Americas
11,900 in Texas
10,600 in North Texas
9,800 in Dallas area
