EmailTexas Instruments (TXN $26.44 -0.38) reported second quarter earnings of $0.44 per share, excluding non-recurring items, $0.04 better than the consensus of $0.40, while revenues fell 3.6% year/year to $3.34 billion versus the $3.34 billion consensus. The company issued downside guidance for the third quarter with EPS of $0.41-0.49, excluding non-recurring items, versus the $0.50 consensus and revenues of $3.21-3.47 billion versus the $3.55 billion consensus. Compared with a year ago, lower gross profit in the quarter primarily reflects lower revenue and the associated costs from low levels of factory utilization. Compared with Q1, higher gross profit reflects higher revenue, which more than offset lower insurance proceeds related to the March 2011 earthquake in Japan. "TI revenue in the second quarter was about as we had expected.
Our Analog and Embedded Processing segments grew sequentially, while our Wireless segment declined. Although we believe customers and distributors have low inventory levels, the global economic environment is causing both to become increasingly cautious in placing new orders. Our backlog grew last quarter but orders slowed in the month of June and our backlog coverage for September is lower than normal. As a result of this increased uncertainty, we currently estimate that our revenue in the third quarter will be about even with last quarter and below our seasonal average growth rate. If customer demand increases as the quarter progresses, we are ready to support higher shipments with short product lead times, a strong inventory position and available manufacturing capacity.
