Texas Instruments Inc. on Thursday reported a surge in third-quarter earnings and said it will boost its capital spending in 1995 to $1.45 billion to satisfy strong demand for semiconductors.
The Dallas-based computer chip maker's profit soared 55% to $289 million in the quarter, from $186 million in the year-ago period. Earnings per share rose to $1.48 from 97 cents, falling within the range Wall Street analysts had forecast.
Revenue jumped 33%, to $3.42 billion from $2.57 billion, boosted primarily by robust chip sales. Orders, mainly by computer and telecommunications equipment makers, grew to $3.39 billion from $2.93 billion, with strong gains in all geographic regions and from all business entities.
The company's backlog of unfilled orders as of Sept. 30 rose to $4.53 billion, up $373 million from a year ago.
Semiconductors account for about 70% of Texas Instruments' revenue. The company expects growth of about 40% in the worldwide chip market in 1995, the third year of a strong expansion.
Demand for DRAMs, or dynamic random access chips, should continue at a very strong pace, Texas Instruments Chief Financial Officer Bill Aylesworth said.
"Pricing is stable right now. . . . We think capacity additions, while high in an absolute dollar sense, are in fact reasonable and in the right range to support the very high demand," Aylesworth said.
Some investors have become concerned about how long the DRAM shortage will last, particularly as chip makers add to capacity.