Texas Instruments Profit Rises, Outlook Strong; Shares Up 5%

(RTTNews) - Analog chip maker Texas Instruments Inc. (TXN), Monday reported a 12 percent jump in profit for the second quarter, driven largely by better cost control and higher revenues. Earnings for the quarter trumped analysts' expectations, as did revenues. The company also detailed a strong outlook for the third quarter, sending its shares up 5 percent in extended trading session.

Dallas, Texas-based Texas Instrument's profit for the second quarter improved 12 percent to $779 million or $0.76 per share from $696 million or $0.65 per share last year. Analysts polled by Thomson Reuters expected the company to earn $0.73 per share.

Revenues for the quarter inched up 1 percent to $3.27 billion from $3.23 billion in the same quarter last year. Analysts had a consensus revenue estimate of $3.20 billion for the quarter.

The company said demand for its products "continued to be strong in the automotive market, and grew in the industrial and communications equipment markets."

Analog revenues were even with last year while Embedded Processing revenue grew 9 percent.

"Gross margin of 61.2 percent reflected the quality of our product portfolio, as well as the efficiency of our manufacturing strategy, including the benefit of 300-millimeter Analog production," CEO Rich Templeton said.

Selling, general and administrative expenses for the quarter dropped to $460 million form $470 million last year.

Looking forward to the third quarter, Texas Instrument's expects third-quarter earnings of $0.81 to $0.91 per share and revenues of $3.34 billion to $3.62 billion. Analysts currently estimate earnings of $0.76 per share and revenues of $3.38 billion.

TXN closed Monday's trading at $66.22, up $0.73 or 1.11%, on the NYSE. The stock further rose $3.81 or 5.75 % in the after-hours trading.