Texas Instruments Inc. shares fell in extended trade Tuesday after the chip maker reported third-quarter revenue below analysts’ expectations and delivered weaker-than-expected guidance.
The chipmaker reported net income of $1.709 billion, or $1.85 a share, compared with net income of $2.295 billion, or $2.47 a share, in the same period last year. Earnings per share included a 5-cent benefit for items that were not in the company’s original guidance, Texas Instruments
TXN,
said in a statement. Analysts surveyed by FactSet were looking for earnings of $1.82 a share.
Third-quarter revenue was $4.532 billion, down from $5.241 billion in the same period last year. Analysts surveyed by FactSet were looking for sales of $4.579 billion. Analog revenue was $3.353 billion, down from $3.993 billion in the prior year’s quarter, and embedded processing revenue was $890 million, up from $821 million in the same period last year. Analysts surveyed by FactSet were looking for analog revenue of $3.296 billion and embedded processing revenue of $887 million.
Related: Texas Instruments’ stock slips as continued capacity buildout amid growing inventory weighs on outlook
“Revenue was flat sequentially and decreased 14% from the same quarter a year ago,” Texas Instruments’ CEO Haviv Ilan said in a statement. “During the quarter, automotive growth continued and industrial weakness broadened.”
During a conference call to discuss results, Dave Paul, Texas Instruments’ vice president and head of investor relations, said that the industrial market was down mid-single digits sequentially, with weakness broadening across nearly all sectors. “The automotive market continued to grow, and was up mid-single digits,” he added. “Personal electronics was up about 20% off a low base … communications equipment was down upper teens and, finally, enterprise systems grew upper single digits.”
For the fourth quarter, Texas Instruments said it expects revenue between $3.93 billion and $4.27 billion and earnings between $1.35 and $1.57 a share. Analysts surveyed by FactSet said they are looking for revenue of $4.502 billion and adjusted earnings of $1.79 a share.
Read: Dividend stocks are dirt cheap. It may be time to back up the truck.
The company’s third-quarter inventory was $3.908 billion, up from $2.404 billion in the prior year’s quarter, and a sequential increase of $179 million.
Texas Instruments’ stock fell 4.4% in extended trades.
Read the full article here