TI Sinks on Disappointing Order and Inventory Figures

Texas Instruments Incorporated (TXN) reported adjusted fourth quarter earnings of $0.64 per share on $3.53 billion in revenue, narrowly topping Wall Street’s expectations. The semiconductor giant also guided in line with estimates for the beginning of 2011, but shares sunk on lower orders and an increase in inventory.

Analysts were expecting a profit of $0.63 per share and $3.5 billion in revenue, on average.

Net income of $942 million was a 44% improvement over last year’s Q4 figure, while sales rose 17%. For the full year, TI’s profit was up 120% while total revenue grew 34%.

Looking ahead, the company expects Q1 earnings of $0.54 to $0.62 per share and revenue of $3.27 to $3.55 billion, bracketing the consensus view for both profit ($0.57 per share) and sales ($3.32 billion).

With all of the above in line with expectations, investors are zeroing in on the disappointing “additional” financial information provided by the chipmaker. Specifically, orders of $3.13 billion were down 4% year over year, while inventory of $1.52 billion at the end of the quarter was 26% higher than the same point last year.

Shares of TXN dropped to $33.60 (-3.03%) in extended trading, eliminating a 2% gain from today’s regular session and taking a big chunk out of the 6.6% gain the stock had compiled over the first three weeks of the year. At this level, the stock yields 1.55%.

Texas Instruments has raised its dividend for seven consecutive years, including the 8% dividend hike given last year, and has increased its dividend rate sixfold over that span. The chipmaker closed out 2010 ranked 41st on my list of The 100 Best Values Among Dividend-Paying Stocks.

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