Cell phone demand pushes Texas Instruments' profit up

By Jason Kelly
Bloomberg News Service

Texas Instruments Inc., whose chips run more than half the mobile phones sold last year, boosted its fourth-quarter sales and profit forecasts as demand improves for handsets with the newest features.

Profit will be 25 cents to 27 cents a share and revenue will rise to $2.64 billion to $2.77 billion, the Dallas-based company said in a statement. Texas Instruments in October predicted sales of $2.49 billion to $2.7 billion.

Demand for new types of mobile phones that have cameras and MP3 audio players is driving sales, and Texas Instruments said its semiconductor revenue will outstrip projections. The remarks echo comments from customers such as Motorola Inc. and chipmakers including National Semiconductor Corp. and Qualcomm Inc., a signal the industry is rebounding, investors said.

"We saw from Qualcomm and National Semiconductor that the whole wireless industry is going well," said Greg Barlage, a chip analyst at Stein Roe Investment Counsel. "We know the business out there is good."

Global mobile-phone sales may exceed 500 million units this year, and sales jumped 22 percent in the third quarter from the year-earlier period, researcher Gartner Inc. said.

Texas Instruments said its semiconductor sales will be $2.33 billion to $2.44 billion, compared with an earlier forecast of $2.19 billion to $2.37 billion.

"There's definitely been some strength in the semiconductor business," Paul Meeks, an analyst at Meeks & York LLC, said. "They also are very focused on the wireless market, which has showed some strength."

Motorola, the world's second-biggest mobile-phone maker, said last week that demand for camera phones in North America, Europe and Asia was overtaking the company's ability to ship some models.