TI Reports Financial Results for First Quarter 2011

Texas Instruments Inc. (TI) announced first-quarter revenue of $3.39 billion, net income of $666 million and earnings per share of 55 cents.

"2011 started strong, with customer demand in January and February tracking our expectations for a first quarter of above-seasonal growth," said Rich Templeton, TI Chairman, President and Chief Executive Officer. "But the Japan earthquake that’s taken such a heartbreaking human toll in the country also disrupted local demand starting in mid-March and impaired operations at two of our factories there. This impact and substantially weaker demand for Wireless baseband chips resulted in revenue that was below the middle of our expected range. The lower revenue combined with expenses resulting from the earthquake affected earnings per share. New orders, however, were strong through the quarter, indicative of the underlying strength in our markets.

"Recovery of our operations in Japan is progressing well. One of our factories will soon be resuming full production, and the other has restarted initial processing of wafers and is on schedule for full loadings in mid-July. Nonetheless, many of our Japanese customers remain in the early stages of reopening their own factories, and we and our customers face potential supply chain disruptions. We expect growth in the second quarter, though it will be pressured by the situation in Japan. Provided consumer and enterprise demand remain strong, we expect a good second half of the year."

TI’s operating profit was negatively impacted by about $30 million for costs resulting from the earthquake. These costs were recorded in the company’s Other segment. TI’s earnings per share were negatively impacted by about 2 cents by these costs.

Operating profit declined from a year ago due to higher operating expenses. Compared with the prior quarter, operating profit was lower primarily due to a $144 million gain on the sale of a product line in the prior quarter and lower gross profit, which resulted from lower revenue.

Net income in the prior quarter also included a $78 million tax benefit, which was primarily associated with the reinstatement of the federal R&D tax credit that was retroactive to the beginning of 2010.