What a great week for Texas fans. First, the Houston Texans overcome the football season's longest opening-day odds to vanquish the Miami Dolphins. Now, Texas Instruments (NYSE:TXN) reports that third-quarter results will be on the high end of expectations.
Strength in its bread-and-butter semiconductor business finds the company tightening its projected range for the better. TI is now looking to earn between $0.20 and $0.22 a share on revenue between $2.4 billion and $2.5 billion. Unfortunately that finds the company raising the floor on the top-line but simply holding firm on the bottom. Wall Street was already braced for the worst after wireless bellwether Nokia (NYSE:NOK) warned -- arguably -- of weakness in the cell phone market earlier this week. Still, even as the presumed margin contraction is dinging TI today it could be a lot worse. The downticks appear overdone.
Coupled with a floor-raising move by Intel (NASDAQ:INTC) last week, it seems as if the chip sector as a whole is becoming a tempting place to be for recovery-minded investors.
Will we forgive TI for its lapse in evenhandedness? Three months ago, it blamed SARS, in part, for a second-quarter shortfall during that period's mid-quarter update. Is it bold enough to hog the credit now for its healthier revenue gains while it shifted the blame to external factors in the previous quarter?
Not really. TI wasn't alone anyway as others such as Motorola (NYSE:MOT), Advanced Micro Devices (NYSE:AMD), and even Intel and Nokia all played the pin-the-tail-on-SARS game. Milking that scapegoat became the industry standard. Besides, there's no point in grilling the messenger when the message is starting to get better.
