Texas Instruments Gives In-Line Outlook, Eases Downturn Fear

(Bloomberg) — Texas Instruments Inc. gave an outlook for the current quarter that was in line with estimates, providing hope that chipmakers are back on a path toward growth.

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Sales in the period ending in September will be $3.94 billion to $4.96 billion, the Dallas-based company said Tuesday in a statement. Analysts, on average, estimated $4.14 billion, according to data compiled by Bloomberg. Profit will be $1.24 to $1.48 a share, compared with an average projection of $1.38.

Suppliers of electronic parts used in the industrial and automotive markets have seen their growth wiped out by slowing orders from customers who have found themselves stuck with too much inventory. Texas Instruments’ outlook stokes optimism that orders may now be on the rise and helps counter fresh concern caused by peer NXP Semiconductors NV, which on Monday gave projections that fell well short of estimates.

“Industrial and automotive continued to decline sequentially, while all other end markets grew,” Texas Instruments Chief Executive Officer Haviv Ilan said in the statement.

Texas Instruments has the widest customer base and biggest product range among chipmakers, so the company’s results and forecasts act as an indicator of demand across a variety of industries. The majority of its chips go into industrial and automotive applications.

Three months ago the company said that some of its many end markets in the industrial category had begun to turn around, sparking optimism for a general improvement.

The shares rose about 4% in extended trading. The stock had earlier closed at $198.29 in New York, leaving them up 16% in 2024. The company’s shares have lagged behind a rally in the Philadelphia Stock Exchange Semiconductor Index this year as investors have poured money into Nvidia Corp. and other companies that make parts for artificial intelligence computing.

Revenue in the second quarter declined 16% to $3.82 billion, marking the seventh consecutive contraction. Analysts projected $3.82 billion. Profit was $1.22 a share, compare with an estimate of $1.16.

Texas Instruments is the biggest maker of analog semiconductors and embedded processors. Its products perform simple but vital functions, such as converting power to different voltages within electronics.

The company is spending heavily on new plants, an effort to bring most production back in house, but weighing down its profit in the meantime. Texas Instruments has said that effort, when complete, will give it a cost advantage over rivals.

(Updates with CEO comment in the fourth paragraph.)