Texas Instruments Stock Tumbles on Disappointing Outlook

Texas Instruments stock is down 4% this year. (Qilai Shen/Bloomberg)

Key Points

• Texas Instruments’ shares dropped over 8% in after-hours trading due to a disappointing December quarter earnings forecast.
• The company reported September quarter earnings per share of $1.48 on revenue of $4.74 billion, missing the earnings estimate but exceeding revenue expectations.
• Texas Instruments projected current quarter earnings per share between $1.13 and $1.39, with the midpoint below the $1.41 consensus.

Texas Instruments provided a disappointing earnings forecast for the December quarter. Its shares fell in after-hours trading.

For the September quarter, the semiconductor company reported earnings per share of $1.48, compared with Wall Street’s consensus estimate of $1.49, according to FactSet. Revenue came in at $4.74 billion, which was ahead of analysts’ expectations for $4.65 billion.

But Texas Instruments forecast earnings per share for the current quarter of $1.13 to $1.39, which, at the midpoint, is below Wall Street’s consensus of $1.41.

Texas Instrument shares fell more than 8% in after-hours trading following the release.

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.

On the earnings conference call, Wall Street analysts were not enthused about the implied gross profit margin from the earnings guidance range for the current quarter. Management called out depreciation costs and lower utilization at factories as drivers.

Texas Instruments stock is down 4% this year through Tuesday’s close, versus the 35% gain for the iShares Semiconductor exchange-traded fund.

The company is the first major semiconductor company to report this earnings season.

Write to Tae Kim at tae.kim@barrons.com