Texas Instruments soft revenue outlook fuels chip supply concerns By Reuters

© Reuters. FILE PHOTO: A Texas Instruments Office is shown in San Diego, California, U.S., April 24, 2018. REUTERS/Mike Blake

By Chavi Mehta

(Reuters) -Texas Instruments Inc forecast current-quarter revenue slightly below Wall Street estimates on Wednesday, leaving investors concerned about the chipmaker’s ability to meet searing demand in the face of a global shortage.

Shares of the Dallas, Texas-based company were down nearly 5% at $185.5 aftermarket.

TI has been ramping up its production capacity even as supply constraints persist, eyeing a boom in demand from many of its end markets. In June, TI said it would buy one of Micron (NASDAQ:)’s factories for $900 million, making it the company’s fourth analog chip-manufacturing plant.

“The common perception in the market is that demand still remains very strong, and many investors expect above-average revenue growth for the next couple of quarters,” said Edward Jones analyst Logan Purk.

“This guidance clearly flies in the face of that belief.”

The company expects third-quarter revenue between $4.40 billion and $4.76 billion, with the midpoint below analysts’ expectations of $4.59 billion, according to IBES data from Refinitiv.

However, the company beat Wall Street estimates for second-quarter results, helped by a more than 40% rise in revenue from both its analog chips and embedded processing businesses.

“Normal seasonal patterns may not be the best measure to look at things in periods like this,” TI’s finance chief, Rafael Lizardi, told analysts, noting that the second quarter was strong both sequentially and year-on-year.

For the second quarter, it earned $2.05 per share, beating analysts’ average estimate of $1.83. Total revenue rose 41% to $4.58 billion, above expectations of $4.35 billion.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Be the first to comment

Leave a Reply

Your email address will not be published.