Texas Instruments' Guidance Falls Short. The Stock Is Falling. -- Barrons.com

By Tae Kim

Texas Instruments provided a revenue forecast for the December quarter that was below expectations, sending its shares lower in after-hours trading.

For the September quarter, the semiconductor company reported earnings per share of $1.47, compared to Wall Street's consensus estimate of $1.38 a share, according to FactSet. Revenue came in at $4.15 billion, which was slightly above analysts' expectations of $4.12 billion.

But Texas Instruments gave a revenue forecast range for the current quarter of $3.7 billion to $4 billion -- which was below the consensus of $4.06 billion.

Texas Instruments shares dropped as much as 2% following the release.

This is breaking news. Read a preview of Texas Instruments earnings below and check back for more analysis soon.

Weakness in several of Texas Instruments' large end markets may lead to a disappointing outlook for investors.

The analyst consensus is for Texas Instruments to report September quarter revenue of $4.12 billion with adjusted earnings per share of $1.38. Analysts' estimates for the current quarter's revenue is $4.06 billion and EPS of $1.34.

Texas Instruments sells the basic building-block chips that go into products in nearly every sector of the economy from autos and industrials to consumer electronics. The company has more than 100,000 customers.

On Sunday, KeyBanc Capital Markets analyst John Vinh warned chip demand in the auto and industrials end markets for Texas Instruments remains challenging.

"We expect broad-based demand trends to remain weak," he wrote. "We expect TXN to post in-line results and lower guidance."

While Vinh sees risk to near-term numbers, he believes the auto market may bottom in the second half of this year and rebound next year. Vinh has an Overweight rating for Texas Instruments and a $250 price target for the stock.

Texas Instruments stock is up 14% this year, compared with the 18% rise for the iShares Semiconductor ETF. The chip maker will be the first major semiconductor company to report its September quarter after the close on Tuesday.

Write to Tae Kim at tae.kim@barrons.com

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October 22, 2024 16:19 ET (20:19 GMT)

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