TI Narrows Guidance

Texas Instruments reaffirmed guidance after the close on Monday. The problem is that investors were expecting more.

Goldman Sachs said last week that it expected TI to raise guidance during its mid-quarter update. Follow a big warning on Friday from Intel , investors were looking to TI for reassurance on the health of the chip sector.

But TI merely narrowed the range it provided in January. TI said it expects earnings of 31 to 33 cents a share on sales of $3.22-$3.35 billion. Wall Street analysts were expecting earnings of 32 cents a share on sales of $3.27 billion. TI’s previous guidance was for earnings of 29 to 33 cents a share on sales of $3.11-$3.38 billion.

On a conference call, TI officials said wireless handset and infrastructure sales are particularly strong. The company also said it was comfortable with the health of the semi cycle because of low inventory levels.

TI shares lost 3% after hours.

TI’s update followed a rocky day for stocks, as rising interest rates overcame a blockbuster merger between AT&T and BellSouth and a settlement in the long-running patent battle between Research in Motion and NTP.

The Nasdaq lost 16 to 2286, the S&P 500 fell 9 to 1278, and the Dow fell 63 to 10,958. Volume rose to 2.28 billion shares on the NYSE, but declined to 2.16 billion on the Nasdaq. Decliners led 22-10 on the NYSE, and 19-11 on the Nasdaq. Downside volume was 69% on the NYSE, and 65% on the Nasdaq. New highs-new lows were 70-20 on the NYSE, and 120-41 on the Nasdaq.

The BellSouth-AT&T merger news put the telecom sector into play. Tellabs and Redback fell on business concerns, while Qwest and Sprint were among those gaining on takeover speculation. The merger means that much of the old AT&T could be reunited, with only Qwest and Verizon remaining separate entities from the 1984 antitrust break-up.

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