TI Joins the Guidance Cut Parade

By William Trent, CFA of Stock Market Beat

Last week, when National Semiconductor (NSM), Xilinx (XLNX) and Broadcom (BRCM) all reduced their outlook, we noted the wireless industry connection between the companies and asked “Who’s next?” It turns out we didn’t have to wait long to find out. TI cuts fourth-quarter financial outlook | Reuters.com

The company, which makes everything from calculators to chips for flat-screen televisions, said it now expects earnings from continuing operations of 37 cents to 40 cents a share compared with its earlier target of 40 cents to 46 cents.It said it now expects revenue of $3.35 billion to $3.5 billion for the quarter. In October it had forecast fourth-quarter revenue of $3.46 billion to $3.75 billion.

When we commented on the misses last week, a commenter asked “which stocks will go up/down.. any ideas?”

So, in case the wireless link wasn’t enough we hereby list a few wireless supply chain companies with a forward P/E ratio of 20 or higher:

Powerwave (PWAV) (35)

Research in Motion (RIMM) (29)

Silicon Laboratories (SLAB) (27)

Cree (CREE) (26)

You’ll have to do your own research to determine whether any of these are worth acting on, but it should provide a good starting point. If you can think of any others, feel free to add them in the comment section.

The author may hold a position in the securities discussed. The author’s current holdings are as follows: Long: FedEx (FDX) put options; Intuit (INTU) put options; Nasdaq 100 (QQQQ) put options; Bookham (BKHM; Ballard Power (BLDP); Syntax Brillian (BRLC); CMGI (CMGI); Genentech (DNA); Ion Media Networks (ION); Lion’s Gate (LGF); Three Five Systems (TFS); Adobe Systems (ADBE) call options; IShares Japan (EWJ); StreetTracks Gold (GLD); Starbucks (SBUX); U.S. Oil Fund (USO); Plantronics (PLT) call options; Short: Ceradyne (CRDN) put options; Lion’s Gate (LGF) call options; Dell (DELL) put options; Plantronics (PLT) put options

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