Texas Instruments Inc. (TI) voiced concern that weakness in the PC market is impacting revenues in the electronics value chain, echoing statements made recently by Intel Corp.
TI’s statements came during its first quarter earnings conference call, when company executives explained that the reason its first quarter revenues were in the bottom range of expectations—growing 6% year-over-year to reach $3.15 billion—was weakness in its personal electronics market—particularly PCs—and the communications equipment market.
Dave Pahl, head of investor relations at TI, says the delay of investments by carriers and capacity upgrades for wireless infrastructure equipment as well as a weaker than expected refresh cycle for Windows XP resulted in revenues that were on the low end of expectations. Pahl also attributes the tepid sales to weakness in the euro against the dollar.
On April 15, Brian Krzanich, CEO of Intel, said he expects a mid-single digit percentage decline in PC sales for the year as the result of a weak refresh in PC cycles with the discontinuation of Windows 7. Krzanich says the introduction of Windows 10 and the roll out of Intel’s sixth generation desktop microprocessor, codenamed Skylake, will help offset the decline, however, but not enough for the PC market to grow as a whole.
“Even with these pockets of weaknesses, our core business of analog and embedded processing turned in their seventh and tenth consecutive quarter of year-over-year growth, respectively,” Pahl says. “Combined, these businesses grew 9% and were 86% of our total revenue.”
TI expects the problematic PC market as well as weakness in communications equipment to continue to impact the company’s top and bottom lines in the second quarter. TI expects second quarter sales to be between $3.12 billion and $3.38 billion.
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