Chipmaker Texas Instruments (TXN) late Tuesday beat Wall Street’s earnings target for the second quarter and matched views on sales. Its outlook for the current quarter was roughly in line with estimates. TXN stock rose in extended trading.
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The Dallas-based company earned $1.22 a share on sales of $3.82 billion in the June quarter. Analysts polled by FactSet had expected earnings of $1.16 a share on sales of $3.82 billion. On a year-over-year basis, Texas Instruments earnings fell 35% while sales shrank 16%.
Texas Instruments has now posted seven straight quarters of declining sales and earnings on a year-over-year basis. Analysts see the declines continuing for at least one more quarter as the company navigates a cyclical downturn in demand.
For the current quarter, TI predicted earnings of $1.36 a share on sales of $4.1 billion. That’s based on the midpoint of its guidance. Analysts were looking for earnings of $1.37 a share on sales of $4.12 billion in the third quarter. In the year-earlier period, it earned $1.85 a share on sales of $4.53 billion.
TXN Stock Rises After Report
“Revenue decreased 16% from the same quarter a year ago and increased 4% sequentially,” Chief Executive Haviv Ilan said in a news release. “Industrial and automotive continued to decline sequentially, while all other end markets grew.”
TI makes analog and embedded processing chips for markets such as industrial, automotive, personal electronics, communications equipment and enterprise systems.
In after-hours trading on the stock market today, TXN stock climbed 4% to 206.25. During the regular session Tuesday, TXN stock fell 3.7% to close at 198.29.
A mixed report from industry peer NXP Semiconductors (NXPI) pulled down Texas Instruments and other chipmakers on Tuesday.
The Philadelphia semiconductor index, known as SOX, dropped 1.5%, on Tuesday. The SOX includes the 30 largest semiconductor stocks traded in the U.S.
NXP Report Spooks Chip Investors
NXP stock tumbled on Tuesday after its second-quarter results and guidance late Monday. The Dutch chipmaker matched expectations for Q2, but came up short with its outlook.
NXP earned an adjusted $3.20 a share on sales of $3.13 billion in the June quarter. On a year-over-year basis, NXP earnings fell 7% while sales declined 5%.
NXP’s automotive chip business, its largest segment, saw sales drop 4% to $1.73 billion in the second quarter. Automotive accounted for 55% of sales in Q2. Chips for industrial and Internet of Things applications were the second largest segment, contributing 20% of sales.
For the third quarter, NXP expects to earn an adjusted $3.42 a share on sales of $3.25 billion, based on the midpoint of its guidance. However, analysts were looking for Q3 earnings of $3.61 a share on sales of $3.36 billion.
NXP stock plunged 7.6% to close at 262.30 on Tuesday.
NXP ranks third out of 32 stocks in IBD’s semiconductor manufacturing industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 91 out of 99.
Meanwhile, TXN stock ranks ninth in the group with a Composite Rating of 75.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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