Texas Instruments Q4 Results Mixed; Shares Edge Up
Published Jan 23, 2019 04:04PM ET
Updated Jan 23, 2019 05:00PM ET
Investing.com - Texas Instruments (NASDAQ:TXN) reported fourth quarter earnings that beat analysts' expectations on Wednesday, but revenue fell short of forecasts in part because of weakness in global smartphone sales.
As a result, the chip maker guided lower for the first-quarter earnings. Nonetheless investors were bidding shares slightly higher.
TI said it earned $1.26 a share on revenue of $3.72 billion. Analysts polled by Investing.com had anticipated EPS of $1.24 on revenue of $3.75 billion. That compared to EPS of $1.09 on revenue of $3.75 billion in the 2017 fourth quarter. The company had reported EPS of $1.58 on revenue of $4.26 billion in the third quarter.
The company expects first-quarter earnings of $1.01 to $1.21 a share, down from an estimate of $1.21. Revenue was projected at $3.34 billion to $3.62 billion for the period, compared with an estimate of $3.61 billion, according to Standard & Poor's Capital IQ.
Texas Instruments shares moved up 1.2% to $96.68 in after-hours trading.
TI shares and shares of other chip companies were down in regular trading Tuesday and again on Wednesday. The culprit was a Lynx Equity Strategies forecast of weaker capital expenditures and pricing pressures.
The company said its core analog chip business saw a 4% revenue gain to $2.64 billion with a 4% operating profit increase to $1.23 billion. Its embedding processing business suffered a 12% revenue decline to $791 million with operating profit falling 24% to $234 million.
The company generates about 95% of its revenue from semiconductors and digital signal processors. The other 5% of revenues comes from the company's ubiquitous calculators.
Analog semiconductors regulate functions like temperature, speed, sound, and electrical current. TI supplies touchscreen controllers, power management chips, and a control device for Apple's (NASDAQ:AAPL) iPhones and iPads. The data the chips generate are used by digital semiconductors and, ultimately, transmitted over the Internet. TI has a 69% market share in the business.
Chipmakers globally have faced challenges in recent months arising from weaker demand, inventory adjustments and U.S.-China trade issues.
Apple this month cut its quarterly sales forecast due to poor iPhone demand in China, battering shares of chipmakers, including Texas Instruments. TI shares are down slightly this month.
-- Reuters contributed to this report.
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Written By: Investing.com
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