The earnings from Texas Instruments (TXN) are a fairly good lock into the broader hardware industry because the company makes chips for such a tremendous array of devices.
The company bested Wall Street forecasts by posting first-quarter revenue of $2.09 billion, net income of $17 million and earnings per share (EPS) of 1 cent.
TI's embedded processor operation, which makes chips for consumer electronics devices, had the smallest drop in revenue among its largest divisions. Revenue was down 26 percent to $316 million dollars, a sign that products running audio and video applications may be doing better than the rest of the tech market.
The most negative move in TI's numbers were the results from wireless chips. In this segment, revenue dropped 40 percent to $551 million and the division actually lost money. Handset sales, the major application for these chips, were down sharply in the first quarter, based on earnings reports from firms like Nokia (NOK). If TI does not signal that this division is seeing a pick-up in business, the cellular industry is likely to have another quarter or two of bad results.
TI makes mid-quarter revisions to its forecast. If it discloses that the trends in either the embedded processor or handset operation have moved up when it makes its next set of predictions in mid-May, it will be an indication of where major parts of the electronics markets are going.
Douglas A. McIntyre is an editor at 24/7 Wall St.