DJ Texas Instruments Guidance Falls Short. The Stock Is Falling. -- Barrons.com
4:15 PM ET 4/25/23 | Dow Jones
By Tae Kim
Texas Instruments provided a revenue forecast for the June quarter below expectations. Its shares fell in after-hours trading.
For the March quarter, the semiconductor company reported earnings per share of $1.85, compared with Wall Street's consensus estimate of $1.77, according to FactSet. Revenue came in at $4.38 billion, which was about in line analysts' expectations of $4.37 billion.
But Texas Instruments gave revenue forecast range for the current quarter of $4.17 billion to $4.53 billion -- which was below consensus of $4.44 billion at the midpoint.
The chip maker sells the basic building-block chips that go into products in nearly every sector of the economy from autos and industrials to consumer electronics. Because of the broad-based nature of the company's more-than-100,000 customers, investors consider the company to be a bellwether for the technology industry, and the economy.
Texas Instruments shares fell as much as 1.4% initially following the release.
This is breaking news. Read a preview of Texas Instruments earnings below and check back for more analysis soon.
Wall Street is cautious about the near-term demand environment for Texas Instruments, but remains enthusiastic over the chip maker's long-term potential.
The company will kick off the earnings season for the semiconductor sector after the market closes.
The analyst consensus is for Texas Instruments (ticker: TXN) to report March quarter revenue of $4.37 billion with adjusted earnings per share of $1.77. Analysts' estimates for the current quarter's revenue is $4.44 billion with adjusted EPS of $1.82.
On Monday, Oppenheimer analyst Rick Schafer reaffirmed his Outperform rating on Texas Instruments stock and raised his price target to $195 from $185. He said that while the chip maker's results later this year may be disappointing, he is optimistic about its business fundamentals over time.
"We see 2023 as a correction year for TXN and the group. Industrial slowdowns likely spread to auto in 2H," he wrote. "TXN remains a premier diversified FCF/return story. We are long-term buyers."
Texas Instruments stock fell 0.6% to $175.90 on Monday.
The analyst expects Texas Instruments will receive a $700 million a year tax benefit from the CHIPS Act starting next year. He also noted that management is committed to returning money to shareholders through dividends and stock buybacks.
The chip maker sells basic building-block chips that go into products in nearly every sector of the economy, from autos and industrials to consumer electronics. Because of the broad-based nature of the company's more-than-100,000 customers, investors consider Texas Instruments to be a bellwether for the technology industry, and the economy.
Texas Instruments shares are up 1.1% for the past 12 months, while the iShares Semiconductor exchange-traded fund (SOXX) is down about 0.6%. The ETF tracks the performance of the ICE Semiconductor Index.
Write to Tae Kim at tae.kim@barrons.com
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