Texas Instruments cuts outlook on earnings, sales

Texas Instruments, which makes chips used in about half the world's cell phones, lowered its range of expected profits and sales in the first quarter, citing a key customer's decision to cut orders, an Associated Press report said.

The Associated Press report said company officials declined to identify the customer, other than to indicate it is a maker of wireless phones.

Two major wireless customers of Texas Instruments, Nokia and Sony Ericsson, both announced last year they would begin ordering some chips from other semiconductor companies instead of relying solely on the Dallas-based company, the report said.

Texas Instruments said it expected to earn between $0.41 and $0.45 per share in the quarter ending March 31, 3 cents lower than the midpoint of a January forecast.

The Associated Press report further said analysts expected $0.46 per share, according to a survey by Thomson Financial.

Texas Instruments also said sales would total between $3.21 billion and $3.35 billion, or about $130 million below the midpoint of the January estimate. Analysts had forecast $3.4 billion.

Back in January, the company said it would earn $0.43 to $0.49 per share on sales of $3.27 billion to $3.55 billion in the first quarter.

If the new forecast is accurate, Texas Instruments' revenue will fall 6% to 10% compared to the fourth quarter but rise 1% to 5% compared to the first quarter a year ago, the report said.

Earnings would also decline from the fourth quarter but remain above the year-ago profit, the report further said.