Analysts: Texas Instruments Inc. Q3 'Not A Read-Through' For Industry

Texas Instruments Inc.'s

third-quarter earnings beat might make it appear immune from weakness in the semiconductor industry, but analysts say the company could still catch a cold. "We question if its immunity will persist." Deutshe Bank's Ross Seymore said in a note Tuesday. "The semiconductor industry, and Texas Instruments, remains inherently cyclical." Seymore maintains a Hold on the Dallas-based company with a $45 target. Earlier this month the comparatively tiny Microchip Technology Inc.

cut its outlook and its Chief Executive Steve Sanghi warned that “another industry correction has begun" and will be seen "more broadly across the industry in the near future.” But Texas Instruments said Monday that its fourth-quarter results will beat expectations, with profits of $0.64 cents to $0.74 cents a share, versus Wall Street's expectation of $0.63 cents a share. Its revenue forecast of between $3.13 billion and $3.39 billion fell in line with analysts' estimates. Macquarie's Deepon Nag boosted his 2014 earnings estimate 4 percent Tuesday, but maintained a hold on the company. "Even if the cycle does eventually hit them, their core margins are improving," Nag said. Nag noted that the company's management says it's seen "no signs of a cyclical downturn," and praised its widening gross margin as well as recent market share gains. Yet the company's results are "unlikely to temper concerns about an industry correction," according to Pacific Crest's Michael McConnell. who maintained a Neutral rating. MKM's Ian Ing followed through on the theme, saying that "we may be entering a cyclically soft environment" in the semiconductor industry. Ing pointed to weak results recently from Fairchild Semiconductor Intl Inc.

and Linear Technology Corp.

. Texas Instruments "may not be a read-through for peers," according to Ing, who maintained a Neutral rating and $44.41 target. Texas Instruments traded recently up 3.7 percent at $46.07 a share; The Philadelphia Semiconductor Index )NASDAQ: SOX) gained 2.3 percent at $596.78 a share.