By Tae Kim and Angela Palumbo
Texas Instruments provided a revenue forecast for the December quarter that was below expectations. Shares though were trading higher in the premarket session Wednesday.
For the September quarter, the semiconductor company reported earnings per share of $1.47, compared with Wall Street's consensus estimate of $1.38, 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.
"Revenue decreased 8% from the same quarter a year ago and increased 9% sequentially. Industrial continued to decline sequentially, while all other end markets grew," Texas Instruments CEO Haviv Ilan said in the release.
Texas Instruments shares dropped as much as 2% following the release and rallied to up 3% later in after-hours trading. At last check, the stock was rising 2.9% in premarket trading to $199.59.
Several peer stocks also were trading higher early Wednesday. On Semiconductor was up 4.4%, NXP Semiconductors was gaining 2.4%, and Analog Devices was up 1.6%.
"Following disappointing recent news out of much of the automotive sector, it appears that investors were girding for an even more conservative outlook," Benchmark analyst Cody Acree, who rates the stock as a Buy with a $230 price target, wrote in a note Wednesday.
On a conference call with investors and analysts, management said it saw strength in the China electrical vehicle market, but weakness in auto sector outside of the Asian country. Executives also said they "haven't seen" the bottom of the current chip downturn yet.
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.
Texas Instruments stock is up 14% this year, compared with the 19% rise for the iShares Semiconductor ETF.
The chip maker is the first major semiconductor company to report its September quarter this earnings season.
Write to Tae Kim at tae.kim@barrons.com
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(END) Dow Jones Newswires
October 23, 2024 08:54 ET (12:54 GMT)
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