I see a bad moon arising.
I see trouble on the way.
I see earthquakes and lightnin'.
I see bad times today.
-- "Bad Moon Rising," by Creedence Clearwater Revival
You just can't beat Mother Nature. Texas Instruments
TI's shares have been lagging the S&P 500 since that tragic event, and this week's earnings report shows that it was for good reason. Despite strong orders, the Texans delivered weak first-quarter sales because of disrupted operations at two chip factories in the disaster-stricken area.
Messed-up production lines and the costs associated with fixing them put an unexpected load on the bottom line. All told, TI saw both sales and earnings rise by 6% year-over-year, which was somewhat less than what the Street had expected.
The book-to-bill ratio crept up above the crucial 1.0 benchmark as unfilled orders started piling up. That's typically a good thing, showing strong demand and giving investors a good handle on how future revenues will shape up. It's different this time because the rising ratio stems from artificially lowered production capacity more than from stronger orders. TI is taking all of this into account for future planning and thus lowered its second-quarter revenue outlook.
In the longer term, TI will eventually repair its Japanese operations and resume filling orders as before. Moreover, the acquisition of National Semiconductor
TI is facing strong competition in certain segments, including challenges to its OMAP mobile processor line chiefly from Qualcomm
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Fool contributor Anders Bylund holds no position in any of the companies discussed here. NVIDIA is a Motley Fool Stock Advisor recommendation. The Fool owns shares of Qualcomm and Texas Instruments. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.