Texas Instruments Inc is reaping the benefits of its concentration on digital signal processors, the company said yesterday as it saw its second quarter profits double compared with the same period last year. Results were also improved by TI’s move away from the difficult memory chip market. Operating margins were up to 21.4% compared with a year ago.
TI posted income of $372m or $0.92 a share for the quarter, up from $142m or $0.35 a share last time, and above analyst predictions of $0.86. Revenue was up 8.3% to $2.35bn up from $2.17bn last time. Including a $52m charge for in-process research and development, associated with TI’s acquisition of cable modem chipset company Libit Signal Processing Ltd, net income was $325m.
Last year, TI sold off its stake in the TI-Acer memory chip joint venture. But any loss of revenue from memory chips was easily replaced in its other markets. DSP revenue rose 23% from a year ago, and 8% sequentially. Revenue from analog chips was up 14% from a year ago and 8% sequentially. Materials and Controls, which sells chips to the automotive industry, was up 5% from last year and 4% sequentially. And the company predicted continued strong growth for the second half of the year, as wireless and broadband communication equipment sales continue to rise.
Revenue included $85m in catch-up royalties from Hyundai Electronics Industries, a result of the cross-licensing pact agreed between the two last month (CI No 3,668). That agreement should see TI pick up royalties of over $1bn from Hyundai over its ten year term. TI also acquired voice over IP company Telogy Networks during the quarter, and is in the process of acquiring ATL Research A/S for radio frequency technology.
