True to form, Texas Instruments
But the gloom didn't last long. As soon as management got on the conference line to explain things to analysts, the drop started to reverse. This morning, shares opened slightly above Wednesday's closing price.
You see, everybody already priced in the main driver of this lowered guidance -- it's just that the press release didn't mention it. "The reductions are due to lower demand from a single wireless customer, where most of our sales are baseband products," said investor relations veteran Ron Slaymaker, unleashing a huge collective sigh of relief. Oh, it's just Nokia
Elaborating further, Slaymaker twisted the knife a bit deeper into Nokia's heart: "In fact, I would say characterizing as the bulk of it being Nokia is probably understating. It'd be closer to say that all of the change in the middle of the range update versus what we were previously was associated with that customer." If not for that toxic customer, TI would simply have narrowed its guidance down around the center of the original range.
One reason for TI shareholders not to lose sleep over Nokia's troubles is that the chip giant is already removing the Finns from the equation. TI has been winding down its baseband radio chips for some time, basically handing that business off to Broadcom
So, other than the Finnish situation, it's simply business as usual for Texas Instruments. The stock has been a reasonable proxy for the S&P 500 index all year long, and this update does nothing to change that performance profile.
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