Fourth-quarter net income fell to $107 million, or 8 cents a share, the Dallas-based company said today. Excluding reorganization costs, earnings were 21 cents a share, topping the average estimate of 12 cents in a Bloomberg survey of analysts.

The recession and slumping demand for mobile-phone chips prompted Texas Instruments to eliminate 1,800 jobs and shed an additional 1,600 through voluntary retirements. The savings from the move, along with cutbacks at its wireless business last year, will save about $700 million a year, the company said.

“Theres hope we are getting to the bottom,” said Bill Kreher, an analyst with Edward Jones in St. Louis. “The quicker we get to the bottom, the quicker we get to the recovery.”

Texas Instruments rose 73 cents to $15.50 in late trading after closing at $14.77 at 4 p.m. on the New York Stock Exchange. The stock fell 54 percent last year.

Sales decreased to $2.49 billion. Analysts had estimated $2.37 billion, according to a Bloomberg survey. Year-ago fourth- quarter profit was $756 million, or 54 cents a share.

First Quarter

For the first quarter, Texas Instruments expects a loss of as much as 11 cents a share and sales of $1.62 billion to $2.12 billion. That compares with analysts estimates of 3 cents in earnings and $2.08 billion in sales on average.

“Our ability to see where the first quarter will go is much less clear than normal,” Chief Financial Officer Kevin March said in an interview. That prompted the company to give a broader forecast range than usual, he said.

The job cuts, which should be completed by the third quarter, will cost about $300 million in severance payouts and other expenses.

“We have taken what we believe is an aggressive and thoughtful resizing of the workforce to meet an extended weak economy,” March said.

Texas Instruments set out last year to find a buyer for a division that makes so-called baseband chips, the main component in mobile phones. The company has given up on finding a buyer and will just let the business wind down, March said.

“We are working now to take out all of the remaining costs and we are managing it as an end-of-life program,” he said.

The operation, called the merchant chipset business, makes semiconductors for general sale. Texas Instruments will continue to sell custom versions of the products for Nokia Oyj and other large customers.

The company had forecast last month that fourth-quarter profit would fall to as little as 10 cents a share, compared with a previous estimate of at least 30 cents. Texas Instruments predicted sales of $2.3 billion to $2.5 billion, down from an earlier estimate of as much as $3.07 billion.

Slowing mobile-phone sales are hurting demand for Texas Instruments digital chips, which run the devices. Demand for analog chips — semiconductors that handle basic functions in everything from cars to washing machines — had helped make for the phone slump, though not enough to maintain sales and profit.

“Theyre doing great in analog, but thats not a bastion — there are definitely some issues there,” said Cody Acree, an analyst at Stifel Nicolaus & Co. in Dallas. He recommends buying the stock.

Earnings Season

Texas Instruments kicked off a third week of earnings reports for major U.S. technology companies. Intel Corp., the only U.S. chipmaker with larger sales than Texas Instruments, reported a 90 percent plunge in profit this month. Shrinking demand is forcing the company to close five plants.

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