Yahoo Finance Texas Instruments Gains on Upbeat Quarterly Sales Forecast
(Bloomberg) -- Texas Instruments Inc. gained in late trading after giving an upbeat sales forecast for the current quarter, indicating that demand for electronic components remains strong.
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Sales will be $4.5 billion to $4.9 billion in the first quarter, Texas Instruments said Tuesday in a statement. Profit will be $2.01 to $2.29 a share. On average, analysts predicted sales of $4.41 billion and profit of $1.90, according to data compiled by Bloomberg.
Texas Instruments is the largest maker of analog and embedded processing chips, which go into everything from household gadgets to space hardware. It has the broadest reach in the industry, making its results a bellwether for electronics demand.
The outlook could help soothe investors after many dumped semiconductor shares in recent weeks, partly on concern that a surge in revenue over the last two years is poised to peter out. But Texas Instruments executives avoided making predictions on when the growth wave might abate, dodging repeated questions on the topic.
Shares rose about 4% in extended trading after closing at $173.96 in New York. The stock, which gained 15% last year, has fallen this month alongside with a general decline in chips stocks.
The company’s performance exceeded its expectations in the fourth quarter, buoyed by an increase in orders across all of its product areas and regions, executives said on a conference call with analysts. In 2021, automotive and industrial sales accounted for more than 60% of its revenue.
Fourth-quarter net income rose to $2.27 per share from $1.80 a share a year earlier. Revenue increased 19% to $4.83 billion. Analysts, on average, estimated $1.95 a share on revenue of $4.42 billion.
Inventory grew in the quarter for the second consecutive period, Chief Financial Officer Rafael Lizardi said. That suggests a shortage of chips is easing. But, at 114 days worth of inventory, the level remains well below normal. Expanding that measure to as high as 190 days is one of Texas Instruments’ goals.
Texas Instruments doesn’t know whether its customers are hoarding chips themselves in the form of inventory, it said. Expedited order requests are more selective than they have been and are concentrated on parts required to finish building devices, executives said, repeating comments made three months ago.
Factories run by Texas Instruments supply about 80% of its own needs, and the Dallas-based company is investing to expand that footprint. Most other chipmakers are more reliant on outsourced manufacturing, which has impeded their ability to meet the flood of orders received during the pandemic. Texas Instruments has said its revenue and orders reflect true demand and that the amount of expedited orders the company is receiving has slowed.
(Updates with comments from executives starting in fourth paragraph.)
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