TXN: The Exhilerating Liberation of Low Expectations
In education, low expectations has been labeled a “soft tyranny.” In investing, they can be something else altogether. As Notablecalls noted yesterday on SeekingAlpha:
Notablecalls: Looks like JPM is hedging their bets on TXN by telling investors to expect a gruesome call. A call that should mark the bottom. That will keep the stock from plummeting if indeed the call is ugly and may even generate a bounce if it’s not. One for traders. Investors…beware. I suspect things will continue to deteriorate for TXN in 2007. At best, the stock is dead money.
The call was, notably, right on the money as a very mixed quarterly report yielded rising share prices in after-hours trading.
Revenue declined 8 percent compared with the third quarter due to a broad- based decline in company semiconductor product revenue of 5 percent and a seasonal decline in graphing calculator sales. Compared with the same quarter a year ago, revenue grew 4 percent due to higher demand for the company’s semiconductor and calculator products.
A whole four percent growth year/year? Be still our hearts! But it gets worse:
TI orders were $3.08 billion. This was a decrease of $352 million from the prior quarter and a decrease of $411 million from the year-ago quarter. The decreases were primarily due to lower demand for DSP and DLP® products in the company’s Semiconductor segment.
Guidance also fell below street estimates. Given TI’s exposure to television and wireless, investors may want to brace for more similar reports to follow.
Disclosure: William Trent has a long position in SMH.
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