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.
Texas Instruments raises the floor. Surprised?
About the Author
Rick Munarriz is a contributing Motley Fool stock analyst and long-time contributor to the company’s free offerings and premium investing services, including Rule Breakers and Supernova. He has analyzed stocks across media and entertainment, retail and restaurants, and emerging technologies for The Motley Fool for 30 years. Rick holds an MBA from the University of Miami, once traveled the country with his band Paris By Air, and on weekends he can be seen on stage at Just The Funny theater in Miami as an improv comedy performer and co-owner. He is a regular guest on CNBC, Fox Business, BBC, and NPR for his expert stock analysis. He lives with his family in Miami and Celebration, Florida.