Nevertheless, TI warned that it could post a loss for the current quarter on falling demand for cell phone chips in the weak economy.

Net profit was $107 million, or 7 cents a share, in the fourth quarter, compared with $756 million, or 54 cents a share, in the year-ago quarter. It said that the latest quarter included restructuring charges of 13 cents per share.

Excluding special charges, profit was 21 cents a share, better than the 12 cents forecast by Wall Street, according to Reuters Estimates.

Revenue fell to $2.49 billion from $3.56 billion, but was better than the average analyst estimates for $2.37 billion.

TI also said it was cutting 12 percent of jobs, including 1,800 layoffs and 1,600 voluntary departures, and warned that current quarter revenue would fall even further.

(Reporting by Sinead Carew; Editing by Matthew Lewis)