Texas Instruments Inc., a leading chip maker and a bellwether in the semiconductor industry, has delivered some cautious signals as it starts the chip earnings season. The company’s forecast for the current quarter suggests “increasing weakness across industrial and a sequential decline in automotive,” which has raised concerns among investors.
Lower Revenue and Earnings Forecast
For the ongoing quarter, Texas Instruments anticipates revenue ranging from $3.45 billion to $3.75 billion, along with earnings per share between 96 cents and $1.16. This forecast is below the FactSet consensus of $4.05 billion in revenue and $1.40 earnings per share. As a result, the company’s shares were down by 4% in aftermarket trading on Tuesday.
Fourth-Quarter Performance
In the fourth quarter, Texas Instruments reported net income of $1.37 billion, or $1.49 per share, compared to $1.96 billion, or $2.13 per share, in the same period last year. Although the FactSet consensus was for $1.47 per share, the company clarified that the earnings per share included a 3-cent benefit that was not initially factored into their original forecasts.
The total revenue for the quarter stood at $4.1 billion, a decline of 13% compared to the previous year, which aligned with the FactSet consensus view. Notably, there was a 12% drop in analog revenue and a 10% drop in revenue from embedded processing. Additionally, sales from the company’s smaller “other” business category fell by 25%.
These results indicate potential challenges faced by Texas Instruments in certain sectors, particularly industrial and automotive markets. The company’s cautious outlook raises questions about the wider performance of the semiconductor industry in the coming quarters.