Texas Instruments sees no recovery even as orders improve

The maker of chips for everything from cellphones to industrial equipment raised its quarterly revenue outlook very slightly on Monday, but kept its per share forecast intact and would not forecast a recovery for the battered chip market.

"End demand is currently deteriorating. We don't believe we can put a stake in the ground and say we're at a bottom yet," TI investor relations executive Ron Slaymaker said on a conference call with analysts.

Slaymaker cautioned that TI's order improvement in the first two months of the year followed a very weak December and fourth quarter.

TI said it now expects first-quarter revenue of $1.79 billion to $2.05 billion, compared with its previous forecast of $1.62 billion to $2.12 billion.

This implies a midpoint of about $1.92 billion, higher than the previous midpoint of $1.87 billion, and above analysts' average estimate of $1.868 billion according to Reuters Estimates.

Broadpoint Amtech analyst Doug Freedman said it was reassuring that TI did not have to reduce its revenue outlook as in previous quarters, but he added that it was too soon to assume that demand for chips, which has fallen sharply in the weak economy, was anywhere near recovery.

TI said it now expects to post first-quarter results ranging from a loss of 8 cents per share to breakeven. On January 26, it had forecast a loss of 11 cents to a profit of 3 cents a share, including a restructuring charge of 3 cents per share.

The new forecast includes a 4 cents per share restructuring charge. The company recently said it will cut its workforce by about 12 percent to reduce expenses.

TI's forecast showed revenue would still be down 25 percent from the fourth quarter's $2.49 billion, analyst John Dryden of Charter Equity Research said.

TI trails Qualcomm Inc in the market for mobile phone chips, where it has been grappling with share losses as well as weak demand due to the recession.

TI shares fell 4 cents on the news to $14.65 in extended trading, after closing at $14.69, down 2 cents, on New York Stock Exchange.

(Reporting by Sinead Carew; editing by Jeffrey Benkoe, Richard Chang)