Summary
Texas Instruments Inc. (TXN) filed an 8-K on November 12, 2001, re-confirming its previously issued outlook for the fourth quarter of 2001. The company indicated that the third quarter likely represented the bottom for semiconductor orders and that the fourth quarter should set the revenue floor. Despite some expected weakness in semiconductors, the company anticipates a sequential revenue decline of approximately 10%, largely driven by seasonality in its Educational & Productivity Solutions (E&PS) segment.
Key Highlights
- 1TXN re-confirms its Q4 2001 financial outlook, stating Q3 likely marked the bottom for semiconductor orders.
- 2Expected Q4 2001 revenue to decline approximately 10% sequentially.
- 3Semiconductor revenue expected to decrease by about 5% sequentially, with DSP growth offset by declines in other products.
- 4Sensors & Controls revenue is projected to remain relatively flat sequentially.
- 5Educational & Productivity Solutions (E&PS) revenue expected to decline significantly by about 60% ($110 million) due to seasonal factors.
- 6Operating margin projected to decline approximately 9 percentage points before special charges and amortization, due to lower revenue and inventory reduction.
- 7Full-year 2001 R&D expenditure revised downwards to $1.5 billion (excluding certain items), and capital expenditures remain at $1.8 billion.
Frequently Asked Questions
The main purpose of this 8-K filing is for Texas Instruments (TI) to re-confirm its previously stated outlook for the fourth quarter of 2001, in compliance with Regulation FD. It does not introduce new material information but reiterates existing guidance.
TI expects its revenue to decline by approximately 10% in the fourth quarter of 2001 compared to the third quarter. This decline is attributed to both seasonal factors and ongoing weakness in the semiconductor market.
The Semiconductor segment revenue is expected to decrease by about 5%. Sensors & Controls revenue is anticipated to be about even. The Educational & Productivity Solutions (E&PS) segment is projected to see a significant drop of about 60% ($110 million) due to the end of the back-to-school season.
Yes, for the full year 2001, TI now expects R&D expenses to be $1.5 billion (excluding certain items), a reduction from its prior estimate of $1.6 billion. Capital expenditures remain unchanged at $1.8 billion.