By Scott Moritz
Texas Instruments (TXN) on Monday slashed its sales forecast as demand slumps.
The Dallas microchip giant posted an adjusted profit of 43 cents a share, below the 52 cents reported in the year-ago period and a penny below analysts estimates. Sales for the third quarter ended last month were $3.39 billion, which is up from $3.66 billion last year and in line with estimates.
But feeling the pinch of a spending slowdown among wireless network builders, TI says fourth quarter sales will likely fall 13% below third quarter levels to about $2.95 billion. Analysts had expected sales in the range of $3.34 billion.
“We entered the third quarter with a cautious view of the economy and its impact on our markets,” TI CEO Rich Templeton said in a press release. “Revenue was weak, as expected, because consumers and corporations reduced their spending in this uncertain economy.”
Shares fell 5% in after-hours trading.
The company outlined a few moves to adjust to the sales shortfall. TI says it plans to reduce its inventory and the supplies sitting with its distribution partners and the company will make cuts in its cellular baseband chip business for wireless devices and networks.
TI says it will take about $110 million in charges related to the restructuring in the coming three quarters.
