Texas issues fresh profit alert

Texas Instruments' revenue: hit by US slowdown

US computer chip-maker Texas Instruments has issued a fresh profits warning as the tech turmoil continues to batter the industry's biggest names.

Texas lowered its profits forecast for the first three months of 2001 just six weeks ago. Now it says it will not achieve those lowered hopes.

This means Texas has now joined the exclusive club of technology companies to have issued more than one profits downgrade.

Texas Instruments, which is the biggest manufacturer of chips for mobile phones, says its first-quarter revenue will fall 20% to about $2.4bn.

Customers have continued to cancel or reschedule backlog

Texas Instruments

Texas had already warned at the beginning of January that its first-quarter results would fall 10% below $3.03bn.

The company has blamed the usual suspect for its downturn in fortunes - a US economic slowdown.

"Market conditions have not improved during the quarter and customers have continued to cancel or reschedule backlog," said the company.

Cost-cutting

At the same time, the company revealed that it had already implemented a cost-cutting programme and planned to launch a hiring freeze.

The company aims to "limit the impact of reduced revenue on profitability" by shortening working weeks and running manufacturing facilities at low power in some areas.

Tech profit warnings

Motorola: loss in Q1

Sun: low earnings

Cisco: hiring freeze

Texas is also offering a new voluntary retirement programme to employees.

In addition, the company has lowered its capital spending plans for 2001 to $2bn, a 30% reduction from last year's $2.8 bn.

Bad news

The warning follows bad news last week from the wireless communications company Motorola, and computer and software firm Sun Microsystems.

Motorola warned that it could make a loss in the first quarter, rather than the profit forecast in January, while Sun said its third-quarter earnings would be well below previous estimates.

Also, Silicon Valley's biggest company, Cisco Systems, told BBC News Online earlier this month that it would stop recruiting new staff.

Again Cisco blamed slowing conditions in the US economy for the cutback.

Shares in Texas fell 48 cents to $29.67 on the New York Stock Exchange, following the news.