TI Tops Forecasts

Texas Instruments reported better than expected quarterly results late Monday, but the company's guidance for the current quarter wasn't everything Wall Street analysts were hoping for.

Still, with results better than expected and inventories improving, investors bid the company's shares 2% higher in late trading.

TI's sales grew 4% from the year-ago quarter — but down 8% sequentially from the third quarter — to $3.46 billion, beating expectations the company had lowered last month. Pro forma earnings of 41 cents a share were 3 cents better than expected.

"Demand in the fourth quarter of the year was unseasonably weak, and we limited production to reduce our inventories," stated TI CEO Rich Templeton. "...Challenges continue in the first quarter as we operate in an environment where customers want lower levels of inventory and where growth in the wireless market is skewed to low-priced, basic-featured cell phones instead of higher-priced, full-featured phones."

TI said it expects first-quarter sales of $3.01-$3.28 billion and earnings of 28-34 cents a share, less than analysts were looking for, and the company also announced plans to eliminate 500 jobs.

Stocks fell sharply during the day as investors remained jittery in the wake of last week's uninspiring results from IBM , Apple and Intel .

AMD lost ground on a deal between Sun and Intel.

SigmaTel gained 10% on a deal with Samsung, while e-Future rose on a contract with Johnson & Johnson .

Sify and Aladdin Knowledge Systems fell on their results.

Dell shed 2% on a UBS downgrade.

The Nasdaq fell 20 to 2431, the S&P 500 lost 7 to 1423, and the Dow dropped 88 to 12,477. Volume declined to 2.65 billion shares on the NYSE, and 2 billion on the Nasdaq. Decliners led 20-12 on the NYSE, and 20-10 on the Nasdaq. Downside volume was 68% on the NYSE, and 80% on the Nasdaq. New highs-new lows were 185-15 on the NYSE, and 84-53 on the Nasdaq.