Science & Technology
Science and Technology
Science and Technology
Fri, June 11, 2010
Thu, June 10, 2010 Texas Instruments, Linear Technology, Intersil, NVIDIA and UBS
CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: Texas Instruments (NYSE: [ TXN ]), Linear Technology Corp (Nasdaq: [ LLTC ]), Intersil Corp (Nasdaq: [ ISIL ]), NVIDIA Corp (Nasdaq: [ NVDA ]) and UBS AG (NYSE: [ UBS ]).
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Here are highlights from Wednesdaya™s Analyst Blog:
Texas Instruments Raises Guidance
In the mid-quarter update to the guidance announced yesterday, Texas Instruments (NYSE: [ TXN ]) narrowed and raised its second-quarter guidance. The company now expects revenue to come in at $3.45 a" 3.59 billion, compared with previous expectations of $3.31 a" 3.59 billion. The EPS guidance was also raised from 56 a" 64 cents to 60 a" 64 cents.
It appears that order fulfillment was better than expected, enabling Texas Instruments to raise the lower end of the previously guided ranges for revenue and EPS. Management stated that they were continuing to bring capacity online, although long equipment lead times were a limiting factor.
Additionally, new orders continue to grow, with the order strength broad-based across all end markets. Texas Instruments stated that the industrial market would be the strongest in the second quarter and, judging from order trends, the recovery in this market lagged that in others.
Management alluded to market share gains for Texas Instrumentsa™ analog and embedded processing product lines. These are expected to continue growing very strongly at double the market rate. Both high performance analog (aHPAa) and power look very strong, with the high volume analog (aHVALa) business only slightly behind. The strength in connectivity products and OMAP application processor will drive the wireless business, although baseband revenue will be flat sequentially. Wireless could decline, as a percentage of sales, as analog and embedded processing outgrow this segment.
Management is hoping to build some internal inventory, although days of inventory will likely be flat, given the strong demand. Texas Instruments also stated that inventory at distributors remains lean.
Slightly higher utilization rates, lower costs (due to the expansion of 300mm capacity) and product mix (increasing percentage of analog and embedded processing products) were cited as positive influences on Texas Instrumentsa™ gross margin going forward.
Although management raised its guidance, analysts have so far not reacted. Consequently, the Zacks consensus estimate remains at 61 cents for the June quarter, or at the lower end of the revised guidance range. In any event, we remain extremely positive about Texas Instruments, which is reflected by the Zacks Rank of 2 (short term Buy) allotted to the shares.
We are also positive about peers such as Linear Technology Corp (Nasdaq: [ LLTC ]), which has a Zacks Rank of 2, although we are a bit more cautious about Intersil Corp (Nasdaq: [ ISIL ]) and NVIDIA Corp (Nasdaq: [ NVDA ]), both of which have been ranked 3 (short term Hold).
No U.S. Peek into UBS Data
Earlier this week, Switzerlanda™s lower house voted against a deal that would have allowed the sharing of the banking data of over 4,000 clients of UBS AG (NYSE: [ UBS ]) with the U.S. government. The clients are alleged to have evaded American taxes.
This rejection is a blow to the deal that was agreed upon in August last year between Switzerland and the U.S. for data transfer of around 4,450 American clients of UBS AG. The details of these clients were supposed to have been handed over to the U.S. Internal Revenue Service by August this year.
However, according to a Swiss court ruling in January this year, the deal violates domestic laws. In April, a special bill was put forward by the government for sharing the alleged clientsa™ details. The Swiss Senate then approved the bill last week. However, the lower house of the Swiss Parliament rejected the bill by a vote of 104 to 76, with 16 abstentions, last Tuesday.
The failure to reach an agreement before the adjournment of the Swiss parliament, which is scheduled later this month, will complicate the dispute further. The U.S. Internal Revenue Service plans to pursue all legal options including the reviving of the case against UBS, if the Swiss government fails to provide information by the August deadline.
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