Texas Instruments Inc. (NASDAQ: TXN) Monday gave a third-quarter revenue forecast that was stronger than some analysts had expected and said customers seem more confident about placing orders for chips.
Orders picked up in the first half of 2013 and Chief Financial Officer Kevin March told the media on Monday that business continues to improve, following weak demand last year due to concerns about the global economy.
Texas Instruments' book-to-bill ratio, a measure of orders filled, was 1.03 in the second quarter, unchanged from the prior quarter. A ratio of over one suggests a chip maker received more orders than it could fill during a given period.
But TI's customers are starting to give the number-three U.S. chip maker a better idea about their future needs.
Texas Instruments is winding down its wireless chip business as competition from Qualcomm and other rivals has hurt profitability. TI is focusing on its analog and embedded chips used in products ranging from cars to televisions and which account for the bulk of the company's revenue.
Analog and embedded account for 78% of TI's revenue, up six percentage points from a year ago, the company said.
TI posted second-quarter revenue of $3.047 billion U.S., down 9% from the year-ago period.
Net income jumped to $660 million U.S, or 58 cents a share, from $446 million U.S, or 38 cents a share, in the 2012 second quarter.
In the third quarter, revenue will range from $3.09 billion to $3.35 billion U.S., the company estimated.
Analysts on average had expected revenue of $3.059 billion U.S. for the second quarter and $3.199 billion U.S. for the third quarter, which ends in September, according to Thomson Reuters I/B/E/S.
Texas Instruments estimated earnings per share of 49 to 57 cents U.S. in the third quarter.
Shares of Texas Instruments closed up 0.43% at $37.42 U.S. on Nasdaq.
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