Texas Instruments Issues Strong Guidance Boosted by Auto, Industrial Demand
26 July 2016 - 8:20AM
Dow Jones News
Texas Instruments Inc. said Monday that demand in the
automotive, industrial and communications sectors helped the chip
maker post revenue and profit in the upper range of its estimates
and issue strong guidance for the current quarter.
Shares, up 35% over the past 12 months, rose 5.8% to $70.04 in
after-hours trading.
For the current quarter, TI sees revenue in the range of $3.3
billion to $3.6 billion with earnings on a per-share basis between
81 cents and 91 cents. Analysts surveyed by Thomson Reuters expect
earnings of 81 cents a share on revenue of $3.4 billion.
"Compared with a year ago, demand for our products continued to
be strong in the automotive market, and grew in the industrial and
communications equipment markets," said Rich Templeton, chief
executive of the company. "Despite sequential growth, demand in the
personal electronics market was down from a year ago."
The Dallas-based company is among suppliers for Apple Inc. TI,
which makes chips used in everything from cellphones to industrial
equipment, has focused on analog chips, which have a high-profit
margin, and embedded processors, the "brains" of many electronic
devices from electric toothbrushes to driver-assistance systems in
autos.
Analysts for RBC Capital Markets believe headwinds could pick up
in the second half of the year. Among other reasons, the analysts
see possible weakness in auto and industrial markets, which have so
far boosted the company's results.
"Over the past 5-10 years, acceleration in electronic content in
the auto and industrial end markets has maintained analog
semiconductor unit growth," the RBC analysts said in a research
note Friday. "A slowdown or pause in the growth rates of
semiconductor content in these end markets could reduce top-line
growth at analog companies."
In the latest period, sales of analog chips were flat at $2
billion, while sales of embedded processors improved 9%, to $755
million.
Over all, TI reported a profit of $779 million, or 76 cents a
share, compared with $696 million, or 65 cents a share, a year
earlier.
Revenue climbed 1.2%, to $3.3 billion
TI had projected second-quarter profit of 67 cents to 77 cents a
share on $3.07 billion to $3.33 billion in revenue, compared with
analysts' projected 72 cents a share on $3.2 billion in revenue,
according to Thomson Reuters.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
July 25, 2016 18:05 ET (22:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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