Texas Instruments has managed to do better than the cocaine nose jobs of Wall Street expected, but the company warned of troubles ahead.
It said that while its second quarter results were OK, it is a little worried about what it will be saying when it comes to its third quarter revenue.
Shares of TI fell one percent in extended trade after it announced that orders weakened in June and that its backlog for shipments due in September is also lighter than expected.
Company executives told Reuters that TI's customers and distributors are "increasingly cautious in placing new orders" because of the global economic environment.
But with TI and Qualcomm reporting slow trades in the next quarter, it does rather suggest that analysts have been getting it wrong about PCs dying because of a shift to mobile and tablets.
For ages we have been saying that declining sales in PCs has nothing to do with the rise of tablets and mobiles, but is purely because of economic circumstances. If tablets and mobiles were canablising PCs then TI and Qualcom, who make mobile chips would be laughing their way to the bank.
So stuck is Wall Street on this illusion that Bernstein analyst Stacy Rasgon had to tell Reuters that TI is perhaps being a little cautious about September.
TI forecast third quarter revenue of $3.21 billion to $3.47 billion. TI's five-year average is for a third quarter sequential growth of 6 percent.
Chief Financial Officer Kevin said it was not clear whether customers were anticipating a slowdown in their own business or taking advantage of TI's ability to deliver chips relatively quickly because it has high inventory levels.
TI made $446 million down from $672 million a year-ago. Revenues fell to $3.34 billion from $3.46 billion. Wall Street expected $3.35 billion. But what does Wall Street know? [Nothing. Ed.]