(Bloomberg) — Texas Instruments Inc. gave bullish revenue forecasts for the current quarter, indicating that a decline in demand for industrial and automotive components could ease.
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Sales during this period will reach $3.95 billion, the company said in a statement Tuesday. Analysts had estimated it at $3.78 billion, according to data compiled by Bloomberg. Earnings will be $1.05 to $1.25 per share, compared to a forecast of $1.17.
The report suggests that customers have started to start ordering chips again after running out of component stocks – a good sign for the industry as a whole. Texas Instruments, which has the largest customer base among chipmakers, serves as a barometer of confidence in the economy — in sectors ranging from space hardware to consumer electronics.
Shares of Texas Instruments rose more than 6% in extended trading following the announcement. They closed at $165.42 on Tuesday in New York.
Most customers in the company’s largest segment, industrial equipment makers, have completed their inventory reduction efforts, Texas Instruments said. But some are still going through the process. This is leading to an uneven recovery in demand, Chief Financial Officer Rafael Lizardi said in an interview.
“Some end markets continue to decline, and some are behaving differently,” he said. “Ninety days ago, all end markets in the industrial sector were down. »
However, society does not really take into account these early signs, which could be false indicators, he said. The chipmaker said it would continue its policy of not making broad forecasts about future demand.
These forecasts follow more than a year of declining sales. First-quarter revenue fell 16% to $3.66 billion, the lowest level since 2020. Analysts had estimated it at $3.6 billion. Earnings rose to $1.20 per share, up from $1.85 a year earlier.
The stock lagged the Philadelphia Stock Exchange’s semiconductor index’s rally this year. Investors have poured money into companies such as Nvidia Corp., rewarding them for increasing orders related to artificial intelligence.
Texas Instruments, on the other hand, is the largest manufacturer of analog semiconductors and embedded processors. Its products perform simple but vital functions, such as converting energy into different voltages within electronics.
Although some of its chips are used in the same machines as Nvidia’s processors, many other products fill more prosaic roles in home electronics, factory machines and vehicles.
These chips typically require less advanced production techniques than digital products, but the company has embarked on an ambitious plan to revamp its manufacturing facilities. As part of this effort, Texas Instruments will virtually end outsourcing of production.
This should give Texas Instruments an advantage over competitors, particularly nascent ones in China, the company argued. It plans a budget of around $5 billion per year…
