Texas Instruments, the biggest maker of chips for mobile phones, announced fourth-quarter profits at the top end of expectations but revenues that stayed flat as semiconductor growth was offset by a seasonal decline in its calculator business.

TI reported fourth-quarter earnings of 40 cents a share after 3 cents of stock-based compensation expenses, compared with its guidance of 38 to 40 cents in December and analyst expectations of 39 cents.

Revenues of $3.59bn were at the lower end of its predicted range of $3.56bn-$3.73bn and below market consensus of $3.64bn surveyed by Thomson Financial. They were up 14 per cent on a year ago but were even compared with the previous quarter.

TI said semiconductor growth had accelerated over the past year and sales rose 3 per cent in the third quarter to $3.23bn, representing 90 per cent of total revenues. It said demand was focused on its digital signal processors (DSPs) and analogue chips used in mobile phones and consumer electronics.

Rich Templeton, chief executive, said TI had achieved its goal in 2005 of $1bn-plus in revenues for chips supplied for next-generation cellphones. Total sales for the year were a record $13.39bn, up 6 per cent on 2004, and operating margins hit a new high of 20.8 per cent. Sales for its Educational and Productivity Solutions division were $67m – down $110m on the previous quarter and $13m on a year previously. TI blamed a seasonal decline for graphing calculators and tighter inventory management at retail customers.

Sensors and Controls sales were $302m, up $22m on the third quarter and $25m on the fourth quarter of 2004, due to higher demand for its sensor products.

TI expects to complete the $3bn sale of the division to Bain Capital, announced earlier this month, in the first half of this year.

TI shares were down 3 per cent in extended trading in New York at $30.74.