CHICAGO, March 10, 2011 /PRNewswire/ -- Zacks.com Analyst
Blog features: Texas Instruments' (NYSE: TXN), Intel
Corp (Nasdaq: INTC), Corning (NYSE: GLW), Microsoft
Corp (Nasdaq: MSFT) and Nokia (NYSE: NOK).
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Here are highlights from Wednesday's Analyst Blog:
Texas Instruments Outlook Narrows
There was not much out of the ordinary in Texas
Instruments' (NYSE: TXN), or "TI" mid-quarter update. The
company narrowed its guidance (as it usually does) to Rev/EPS of
$3.34-$3.48 billion/$0.56-$0.60 from $3.27-$3.55 billion/$0.54-$0.62 and stated that end market trends
were tracking in line with normal seasonality.
The only exception was the PC business, which was slower than
expected in February. TI attributed the slowdown to another
supplier's processor chip recall, obviously referring to Intel
Corp's (Nasdaq: INTC) Cooger chipset. However, TI assured that
demand was already picking up and that tablet demand remained
strong, in line with expectations.
We were a little surprised that TI did not see any improvement
at television customers, since glassmaker Corning (NYSE:
GLW) reported significantly stronger demand from the LCD TV market
in the last quarter, suggesting that the inventory glut had
cleared.
Industrial holding out flat with the fourth quarter is an
encouraging sign, as is the strength in automotive (driven by
incentive-driven spending as well as increasing electronic content
per vehicle).
The wireless baseband business is going to be seasonally down
(as expected) and TI remains on track to phase it out by the first
quarter of 2013.
Management stated that the recent agreement between Microsoft
Corp (Nasdaq: MSFT) and Nokia (NYSE: NOK) would not
unduly hurt its revenue, since the company was in any case phasing
out the baseband business with Nokia (TI is the exclusive supplier
to Nokia and decided to divert R&D effort to higher-margin
areas a couple years ago).
TI does not expect any inventory accumulation at distributors,
and expects sell-in to be similar to sell-out in the quarter.
The Zacks Rank on TI shares is #3, which translates into a
short-term Hold recommendation. Our longer-term view remains
Neutral.
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