Texas Instruments cut its second quarter outlook due to the fallout at one customer: Nokia.
Nokia, which is reeling from falling sales as it transitions to Windows Phone 7 and faces weak profit margins, warned about future quarters already. Now it's time for the supplier fallout.
Texas Instruments projected earnings for the second quarter between 51 cents a share and 55 cents a share, down from a previous range of 52 cents a share to 60 cents a share. Revenue was projected to be $3.36 billion to $3.5 billion, down from a previous range of $3.41 billion to $3.69 billion.
On a conference call with analysts, Texas Instruments was clear that Nokia was the problem.
Ron Slaymaker, vice president of investor relations, said TI was seeing strong growth for the most part. Tablets and e-reader demand was strong. TVs and game consoles were slow. Industrial processor demand---solar, e-meters and motor---was strong.
However, Nokia accounts for 19 percent to 20 percent of TI revenue, say analysts. Slaymaker was then asked explicitly how much of TI's miss was related to Nokia. He said:
The bulk of it being Nokia is probably understating, probably be closer to say all of the change was associated with that customer, and that's not to say there aren't other pluses and minuses.