Texas Instruments to cut 1,100 jobs worldwide

President and Chief Executive Officer of Texas Instruments Inc. Richard Templeton speaks during a news conference in southern Indian city of Bangalore March 28, 2006.

Texas Instruments Inc plans to cut 1,100 jobs in the United States, Japan and India, or about 3 percent of its global workforce, in a corporate restructuring to save $130 million by the end of 2014.

The U.S. chipmaker, which in 2012 announced it would lay off 1,700 people as it wound down its mobile processor business, said on Tuesday it wanted to reduce expenses in its embedded-processing division and in Japan.

"Technology markets mature from time to time and you have to rebalance where you spend your money," Chief Financial Officer Kevin March said in an interview. "In the case of Japan, the size of the market there has been declining for a number of years."

While TI is better known to many consumers for its calculators, the Dallas-based company is regarded as a barometer of the chip industry because it makes components for a variety of markets, including industrial, automotive, consumer electronics and communications.

Demand for TI chips has gradually improved in recent months although many on Wall Street have been watching for a larger pickup, including an elusive buildup in inventories by manufacturing customers.

March said most of TI's customers have kept their inventories "extremely lean," largely because TI in recent years has increased its own store of available components so that it can fill new orders quickly.

Job cuts to TI's embedded business are centered mostly on products that have seen slow growth, he said. The job cuts in Japan will include sales and customer support.

TI took a $49 million charge in the fourth quarter, to be followed by about $30 million in the first.

"This to me shows they believe there are some more efficient ways to run the business than they were running it," RBC analyst Doug Freedman said of the chipmaker's job cuts.

TI is the second major chipmaker in the past week to announce layoffs.

Intel Corp said on Friday it plans to reduce its global workforce of 107,000 by about 5 percent this year as the chipmaker, struggling with falling personal-computer sales, shifts focus to faster-growing areas.

TI, which has gradually withdrawn from an intensely competitive mobile phone arena to focus on supplying chips for more lucrative markets like cars and communications, posted fourth-quarter revenue on Tuesday that was up 2 percent from the year-ago period, above expectations.

TI reported fourth-quarter net income of $511 million, or 46 cents a share. The $49 million charge reduced earnings by 3 cents a share due to the restructuring.

In the year-ago quarter, TI had net income of $264 million, or 23 cents.

Revenue rose to $3.03 billion in the fourth quarter - a little higher than expected - from $2.98 billion in the year-ago quarter. TI estimated first-quarter revenue of $2.83 billion to $3.07 billion.

Analysts on average had predicted $2.987 billion in revenue for the fourth quarter and $2.95 billion for the first quarter, according to Thomson Reuters I/B/E/S.

It said it expects EPS in the first quarter of 36 cents to 44 cents.

On a conference call with analysts, TI said it will stop providing mid-quarter updates to its outlook because its business increasingly reflects broad trends instead of changes caused by major customers.

Shares of TI fell 1.59 percent in extended trade after closing up 0.92 percent at $43.85 on Nasdaq.(GNN)(Reuters)(GNN INT)

(Editing by Richard Chang)

Secret Service probes link between border arrests, Target data breach

People shop at a Target store during Black Friday sales in the Brooklyn borough of New York, November 29, 2013.

The U.S. Secret Service said on Tuesday it was checking for links between the recent hacking of consumer data from Target Corp and the weekend arrest of two Mexicans who tried to enter the United States at a Texas border crossing with a cache of fraudulent credit cards.

But other law enforcement sources said it was not clear whether there was a link between the Target data breach and the arrests, which occurred at the U.S. border crossing at McAllen, Texas.

Edwin Donovan, a spokesman for the Secret Service in Washington D.C., confirmed that the agency was looking for any connection between Target data breach and the two Mexicans.

Target has said a breach of its networks during the busy holiday shopping period resulted in the theft of about 40 million credit and debit card records and 70 million other records with customer information such as addresses and telephone numbers.

"The U.S. Secret Service continues to work closely with affected parties and law enforcement to investigate the Target breach. In regards to the arrest announced yesterday, the Secret Service is working with the U.S. Attorney's Office and McAllen Police Department to determine if there is any connection," Donovan said in an email.

Three law enforcement sources familiar with the matter said there were indications that any connection between the Target breach and the man and woman could turn out to be insignificant and indirect.

One possible explanation, they said, is that the arrested pair somehow acquired credit card or other data stolen from Target over the Internet and had no real knowledge or involvement, other than as data purchasers, of the people who originally carried out the hack, who investigators say may be based in Eastern Europe.

Reports from McAllen quoted Victor Rodriguez, the local police chief, as saying that Mary Carmen Garcia Vaquera, 27, and Daniel Guardiola Dominguez, 28, both from Monterrey, Mexico, had been detained and charged with fraud related to the Target hack.

Rodriguez was quoted by the Wall Street Journal saying that the pair had used credit card data stolen from Target to purchase tens of thousands of dollars worth of goods from Walmart, Best Buy and other stores in South Texas.

The Los Angeles Times quoted another McAllen police spokesman as saying the two detained individuals had been carrying 90 fraudulent credit cards and another 22 that were found later.(GNN)(Reuters)(GNN INT)

(Reporting by Mark Hosenball; Editing by Ros Krasny and Steve Orlofsky)

Russia hacked hundreds of Western, Asian companies: security firm

A U.S. cybersecurity firm says it has gathered evidence that the Russian government spied on hundreds of American, European and Asian companies, the first time Moscow has been linked to cyber attacks for alleged economic - rather than political - gains.

According to the firm, CrowdStrike, the victims of the previously unreported cyber espionage campaign include energy and technology firms, some of which have lost valuable intellectual property.

CrowdStrike declined to go into detail about those losses or to name any victims, citing confidentiality agreements related to its investigation.

Officials with the Russian Interior Ministry could not be reached for comment early on Wednesday in Moscow.

"These attacks appear to have been motivated by the Russian government's interest in helping its industry maintain competitiveness in key areas of national importance," Dmitri Alperovitch, chief technology officer of CrowdStrike, told Reuters on Tuesday evening.

Cybersecurity researchers have in the past said that China's government was behind cyber espionage campaigns against various corporations dating back as far as 2005, but China has vehemently denied those allegations. Alperovitch said this is the first time the Russian government has been linked to cyber intrusions on companies.

Governments have been using computer networks to spy on each other for more than 30 years in the type of surveillance programs conducted by virtually every nation, according to CrowdStrike. It is only in the past decade that some nations have started using cyber espionage as a platform for gaining data to help promote their national economic interests, according to Alperovitch.

CrowdStrike has been following the activities of the Russian group of hackers, which it dubbed "Energetic Bear," for two years. The firm believes the Russian government is behind the campaign because of technical indicators, as well as analysis of the targets chosen and the data stolen, according to Alperovitch.

"We are very confident about this," he said. Victims include European energy companies, defense contractors, technology companies and government agencies, according to the CrowdStrike report.

Manufacturing and construction firms in the United States, Europe and Middle East as well as U.S. healthcare providers were also cited as targets in the report that was posted on the web early on Wednesday morning, here

CrowdStrike described the activities of the Energetic Bear hackers in its annual cyber threat report, released on Wednesday. It also documented attacks by hacking groups in China and Iran and described the activities of the activist Syrian Electronic Army.

Alperovitch, who is of Russian ethnic origin and now lives in the Washington, D.C., area, is an expert on cyber espionage who rose to prominence while working for McAfee Inc. While there he managed a team of researchers who produced a landmark January 2010 report that described how Chinese hackers had launched an unprecedented series of attacks known as "Operation Aurora" on Google Inc and dozens of other companies.

In 2012, he co-founded CrowdStrike, which collects intelligence about the activities of hacking groups around the world and sells software to thwart such attacks.

He told Reuters that the data his firm has obtained about Energetic Bear suggests that authorities in Moscow have decided to start using cyber espionage to promote Russia's national economic interests.

"They are copying the Chinese play book," he said. "Cyber espionage is very lucrative for economic benefit to a nation."(GNN)(Reuters)(GNN INT)

(Reporting by Jim Finkle, additional reporting by Megan Davies in Moscow; Editing by Tiffany Wu and Ken Wills)

IBM misses revenue targets again after stumbling in China

Visitors walk past the IBM booth at the 9th China International Software Product & Information Service Expo in Nanjing, Jiangsu province September 6, 2013.

IBM Corp missed revenue expectations for the fourth consecutive quarter as the world's biggest technology services company grappled with weakening demand for its servers and storage equipment, particularly in growth markets like China.

As a result of the disappointing results, Chief Executive Officer Ginni Rometty and her team will forego their annual incentive payments for 2013 as IBM's total revenues fell 2 percent to $99.8 billion for the year.

Total revenue for the quarter ended December 31 fell 5 percent to $27.7 billion, missing analysts expectation of $28.25 billion, according to Thomson Reuters I/B/E/S.

Hardware revenue plunged 26 percent, leading to a $750 million collapse in profit for that segment. IBM shares fell 3.5 percent to $181.68 in after-hours trade.

IBM's results are certain to accelerate the company's restructuring.

"As we look forward to 2014, we will continue our transformation," Martin Schroeter, IBM's chief financial officer, told analysts. "We will acquire key capabilities, we will divest businesses and we will rebalance our workforce as we continue to return value to shareholders."

IBM, which has been expanding its higher-margin services and software businesses over the last decade, is expected to relinquish more of its lower-margin hardware business. Revenue in that business, which includes server and storage products, fell for the ninth consecutive quarter as more companies switched to the cloud from traditional infrastructure.

'EVERYTHING BUT GROWTH'

Emerging market sales dropped 6 percent, led by China, where IBM reported a 23 percent collapse in revenue.

A backlash against U.S. government spying in emerging economies and a move by Beijing to encourage state-owned companies to buy domestically-branded products contributed to plummeting demand, some analysts said.

"Their growth markets were everything but growth," Forrester analyst Andrew Bartels said. "They have had quite a bit of success with sales of hardware in these emerging markets, but these markets are not doing well. They're facing competition in those markets."

Asia-Pacific revenue fell 16 percent, while that from Brazil, Russia, India and China fell 14 percent in the quarter.

"China is going through a very significant economic set of reforms," Schroeter said on the earnings call. "While they have slowed, we don't think that this opportunity has gone away."

Schroeter said that revenue in the world's second-biggest economy, which accounts for about 5 percent of IBM's sales, will take several quarters to recover.

"It's not going to rebound immediately," he said.

IBM's China difficulties, coupled with the company's ongoing weakness in hardware sales, may accelerate IBM's sale of the its low-end servers business to Lenovo Group Ltd, said Steve Zhang, a senior technology analyst at Macquarie Bank in Hong Kong.

Sources said IBM and China's Lenovo have revived discussions about a sale of the company's low-end server unit, but executives did not mention that on Tuesday.

"Theoretically, if IBM does sell is low-end hardware business, there should be some upside because they will be able to sell into government agencies and state-owned enterprises," Zhang said.

IBM will be "on a trajectory to growth" in emerging markets by the end of the year, Schroeter said. "We're comfortable that we get back to mid-single digits across the growth market regions by the end of the year."

IBM forecast that full-year 2014 adjusted profit would beat analysts' expectations and also affirmed its 2015 target for operating EPS of at least $20 per share.

Edward Jones analyst Josh Olson told Reuters the company would need solid performance in software and services to meet its target, since expectations are that hardware will not contribute to profit in 2014.

"Assuming a normalized tax rate, this doesn't leave a lot of room for error," he said.

NO INCENTIVE PAYMENTS

"In view of the company's overall full-year results, my senior team and I have recommended that we forgo our personal annual incentive payments for 2013," CEO Rometty said in a statement. For 2013, her base pay was $1.5 million and annual incentive payment target was $4 million.

Revenue from IBM's system and technology unit, which includes servers and storage, fell 26.1 percent to $4.26 billion. Revenue from global technology services, its largest business, fell 3.6 percent to $9.92 billion.

Software revenue was the only bright spot. It grew 2.8 percent to $8.14 billion in the quarter.

IBM and rivals such as Oracle and SAP are racing to meet surging demand for web-based software products, better known as cloud computing.

Moving to the cloud allows businesses to cut costs by ditching bulky servers for network-based software and using remote data centers run by technology companies.

The global cloud services market last year grew by almost a fifth to an estimated $131 billion, according to research firm Gartner. IBM Markets Intelligence estimates the market could be as big as $200 billion by 2020.

Net income for the fourth quarter rose to $6.2 billion, or $5.73 a share, from $5.8 billion, or $5.13 per share a year earlier. It got help though from a lower tax rate of 11.2 percent in the fourth quarter, down 14.3 points from a year ago.

On an adjusted basis, it earned $6.13 per share, above analysts' estimates of $5.99 per share.

Before its after-hours decline, the stock closed at $188.43 on Tuesday on the New York Stock Exchange. It has gained about 2 percent since it reported third-quarter results in October.(GNN)(Reuters)(GNN INT)

(Additional reporting by Matthew Miller in BEIJING; Editing by Savio D'Souza, David Gregorio and Matt Driskill)