Pretty Fly for a TI Guy

Just last month, chip maker Texas Instruments (NYSE: TXN) raised its fourth-quarter targets. Including a gain from the sale of shares of Micron (NYSE: MU), the company said it would earn $0.25 to $0.27 a share on revenues of $2.64 million to $2.77 million. That was up from original guidance issued back in October. The actual numbers were even better.

Last night, Texas Instruments reported earnings of $0.29 a share on $2.8 billion in revenue. While the bottom line was juiced by a reduction in estimated taxes for 2003, the fact that the company hit the high end of its profit forecast is impressive.

Of course, visibility is low in the fickle chip sector. That's why Texas Instruments, like Intel (Nasdaq: INTC) and TriQuint (Nasdaq: TQNT), provides mid-quarter updates to check initial projections.

At the same time, the fact that the revisions are rising instead of falling is encouraging. An improving book-to-bill ratio of 1.12 -- which implies that the company received 12% more in booked orders than it billed during the quarter -- should help assure continued short-term financial improvement.

Strength in wireless devices led the way, but Texas Instruments showed improved demand for its digital signal processors all across the board. While the company credits the revitalized sector for part of the company's success, it is also tooting its own horn, claiming market share gains along the way.

Given the company's $2.2 billion in cash flow from operations in 2003 and a balance sheet ripe with $5.7 billion in cash, maybe it's fitting that the Super Bowl will be played this weekend in Texas. Texas Instruments, well, it's got game.

Were you impressed with Texas Instruments' report or were you expecting more? Will everything be cool as long as the book-to-bill ratio stays above 1? Are you circling March 8 on the calendar as the day for the company's next mid-quarter report? All this and more -- in the Texas Instruments discussion board. Only on Fool.com.