Texas Instruments Stock Slides on Disappointing Outlook

China represents about 19% of overall sales for Texas Instruments. (N. Johnson/Bloomberg)

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

For the June quarter, the semiconductor company reported earnings per share of $1.41, compared to Wall Street’s consensus estimate of $1.36, according to FactSet. Revenue came in at $4.45 billion, which was ahead of analysts’ expectations for $4.36 billion.

But Texas Instruments forecast earnings per share for the current quarter of $1.36 to $1.60. The midpoint of that range is below the Wall Street consensus call of $1.51.

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

On a conference call with investors and analysts, management said the auto market hasn’t recovered yet and the risk of new tariffs in the future isn’t over.

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. Because of the broad-based nature of the company’s more than 100,000 customers, investors consider the company to be a bellwether for the technology industry and the economy.

The chip maker is the first major semiconductor company to report this June quarter earnings season.

On Sunday, KeyBanc analyst John Vinh reiterated his Overweight rating for the stock and reaffirmed his $240 target price, citing optimism about the company’s China business. China represents about 19% of overall sales for the chip maker, according to FactSet.

Texas Instruments stock is up 15% this year, versus the 13% gain for the iShares Semiconductor exchange-traded fund.

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