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Tuesday, October 21, 2008

Texas Instruments (TXN) guides significantly lower

So about 6 months ago I was railing on Texas Instruments because of their distribution model -- my theory was when the cell phone market slowed down they wouldn't see it as quickly. I suggested multiple quarters of underperformance due to a slowing cell phone market. Last night, Texan guided Q4 numbers well below the street and sounded pretty darn awful. They probably miss for another couple of quarters -- they're a very slow boat and it takes a long time for industry corrections to work their way through their model.

A lot of ongoing weakness is suggested by semiconductor valuations at this point but the group tends to trade on direction of orders. Orders are still headed lower in the space. The multiples can keep bleeding.

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