Texas Instruments sees 34% hike in profits

TTexas Instruments said its fourth-quarter profit rose 34 percent, but warned that sales in the current quarter might be disappointing.

Revenues increased 14 percent to $3.59 billion in the quarter ending Dec. 31, 2005, from $3.15 billion in the same quarter a year ago.

Net income rose 34 percent in the fourth quarter to $655 million, or 40 cents a share, up from $490 million in the fourth quarter of 2004. But the Dallas company said second-quarter sales might trail estimates by as much as $350 million.

According to a Reuters report, Chief Financial Officer Kevin March said fourth-quarter revenue was held back because the company was unable to meet customer demand due to slow delivery and assembly of chip testing equipment.

“Our inventory levels are still below where they need to be. We hope to get them near where they need to be by the end of the first quarter but that will be a function of demand,” he said.

Diluted earnings per common share rose modestly in the fourth quarter to 40 cents per share, up from 38 cents per share in the third quarter. Year-end figures saw diluted earnings per common share at $1.42 in 2005, up 34 cents from 2004 at $1.08.

Dallas-based Texas Instruments also announced that its board of directors approved a plan to repurchase $5 billion of its common stock, making a total of $10 billion in stock buy-backs since September 2004.

On Jan. 9, TI announced plans to divest its sensors and controls operations, headquartered in Attleboro, Mass., to Bain Capital, a global private equity firm, for $3 billion. The deal is expected to close in the first quarter of 2006.

Texas Instruments employs about 150 people at its power supply control and small computer standard interface product groups in Manchester. — CINDY KIBBE