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Texas Instruments earnings, forecasts beat views on auto demand

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Texas Instruments, the largest maker of analog semiconductors, forecast sales and profit that may beat analysts’ estimates on stronger orders for chips used in cars and industrial machinery.

Third-quarter net income will be 81 cents to 91 cents a share, the Dallas, Texas-based company said in a statement Monday. It predicted sales will be $3.34 billion, to $3.62 billion. Those forecasts compare with average analyst estimates of 81 cents a share on sales of $3.38 billion, according to data compiled by Bloomberg.

In the second quarter, Texas Instruments’ net income rose to $779 million, or 76 cents a share, from $696 million, or 65 cents, a year earlier. Revenue rose 1.3 percent to $3.27 billion, in the period, the chipmaker said. Analysts on average had projected net income of 73 cents on $3.2 billion in sales.

Under Chief Executive Officer Rich Templeton, Texas Instruments has spread its bets across multiple markets for semiconductors by building itself the broadest product range and customer list in the industry. While that strategy hasn’t delivered a surge in sales growth, the company has increased profitability and cash returns to investors.

While the chipmaker has tried to lessen its dependence on any single customer, in the first quarter, Apple was Texas Instruments’ largest buyer, providing about 10 percent of revenue.

Texas Instruments’ reach makes its earnings a proxy for demand across major parts of the economy including cars, telecommunications equipment and industrial equipment.

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