Weak sales drag down Texas Instruments Q2 earnings

Texas Instruments reported that its second-quarter profit fell 4%, missing Wall Street estimates and sending the stock to a multiyear low in after-hours trading.

An Associated Press report further said the chip maker reported net income of €369 million (US$588 million), down from €385.5 million (US$614 million) in the same period a year ago.

Sales fell 2% to €2.1 billion (US$3.35 billion). Analysts polled by Thomson Financial had expected profit of €0.28 (US$0.46) per share on sales of €2.1 billion (US$3.39 billion).

The results were at the lower end of the company's own estimates, the Associated Press report said.

The main culprit for the earnings decline was the business of selling chips for cell phones.

Those sales have been falling for a while, but investors had taken heart Thursday from a healthy earnings report by Nokia, the division's biggest customer.

Sony Ericsson and Motorola are other big customers. Sony Ericsson reported a 9% sales drop last week.

Sony Ericsson has been shifting orders away from TI, but apart from that, the company is maintaining its share of customer orders.