Chipmaker Texas Instruments posts revenue drop on slower demand
Chipmaker Texas Instruments on Wednesday said revenues fell in the fourth quarter as demand for its products slowed across most markets and delivered a soft outlook for the current quarter.
The Dallas-based company said revenue fell 1 per cent from a year ago to $3.72bn, just shy of analysts’ estimates for $3.74bn, according to a survey of analysts by Refinitiv.
The company noted its sales decreased “as demand for our products continued to slow across most markets”. Revenue for its analogue products grew 4 per cent but declined 12 per cent in its embedded processing business.
Texas Instruments said on its earnings call that demand in China was weaker than in other regions and added that its customers signalled “this weakness is primarily from increased caution due to trade tensions”.
Net income more than tripled to $1.24bn from $344m in the year-ago quarter as the company noted sharply lower provisions for income taxes. That translated to earnings of $1.27 a share, compared with 34 cents a share in the year-ago quarter and topped analysts’ estimates for $1.24 a share.
Texas Instruments makes chips for products ranging from small personal gadgets like calculators to high-end industrial equipment and has more recently benefited from a move by automakers into self-driving technology. However, in October the company became among the first in the sector to warn of a slowdown in its so-called end markets, driven by a deceleration in semiconductors.
The company also endured a flux in leadership last year after its chief executive Brian Crutcher abruptly resigned less than seven weeks into his job last summer owing to “violations” of the company’s code of conduct.
For the current quarter, the company forecast revenue between $3.34bn to $3.63bn, with the low-end of that projection below analysts’ estimates for $3.59bn.
It also provided a soft earnings guidance of between $1.03 a share to $1.21 a share, which includes a roughly $20m discrete tax benefit. That compared to analysts’ expectations for $1.20.
Texas Instruments shares, which are up 1 per cent year-to-date, having declined 9 per cent last year, rose nearly 2 per cent in after-hours trade.