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Influential technology companies Texas Instruments (TI) and computer hardware maker Sun Microsystems have both warned of lower future profits.

Dallas-based TI, the leading supplier of microchips used within mobile phones, has said it now expects to achieve lower-than-forecast earnings per share of between 30 to 36 cents for the last quarter of 2008, based on recent order weakness. The warning accompanied news of a dramatic drop in quarterly net income, from $776 million in 2007 to $563 million. Rich Templeton, TI chairman, president and chief executive, explained that ‘our outlook for the fourth quarter is for revenue to decline substantially, based on weak order trends over the past few months’. In response, inventory levels have been aggressively reduced and TI is looking to sell off part of its business to cut costs.

In a further sign that consumer slowdown and the credit squeeze are taking hold and sapping demand in the tech sector, Sun Microsystems said it expected to unveil a net loss for the final quarter of 2008 of 25 to 35 cents a share, far wider than the 16 cents per share loss that had been pencilled in by analysts. In a prepared statement, chief executive Jonathan Schwartz lamented the fact that ‘Sun and its customers are seeing the impact of a slowing economy.’

Among UK small caps, Wolfson Microelectronics, the supplier of mixed-signal semiconductors for consumer electronic products, has become the latest tech firm to warn of further weakening in trading. Its gloomy pronouncement was twinned with results for the third quarter, showing a drop in sales from $70.4 million to $60.5 million and reduced operating profits of $5 million (2007: $13.7 million).

Wolfson Microelectronics	LSE	£101.69m	88.25p	-2.00p
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