Texas Instruments Forecasts Upbeat Current-Quarter Earnings on Strong Chip Demand


A Texas Instruments office is shown in San Diego, California, U.S., April 24, 2018. REUTERS/Mike Blake

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July 26 (Reuters) – Chipmaker Texas Instruments Inc (TXN.O) forecast current-quarter revenue well above expectations on Tuesday, betting on sustained demand from industrial and automotive customers and improved shipments as supply chain bottlenecks begin to reduce.

The Dallas, Texas-based company’s share rose 4% in extended trading, with chipmakers Intel Corp (INTC.O) and Nvidia Corp (NVDA.O) also posting gains.

Some of the biggest chip companies, including Taiwan Semiconductor Manufacturing Co (2330.TW) and Texas Instruments, weathered slowing lockdowns in China, supply chain issues and a challenging macro environment globally , supported by growth in new areas such as data centers and electric vehicles.

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Earlier this month, TSMC predicted quarterly revenue growth that could be the highest in 10 quarters. (https://reut.rs/3J0F8nt)

Texas Instruments said revenue from the industrial and automotive segments, its top earners, grew mid-single digit and 20%, respectively, in the quarter ended June 30.

The company expects sales in the range of $4.90 billion to $5.30 billion for the current quarter, versus an analyst estimate of $4.97 billion.

However, projections for the seasonal third quarter were impacted by weaker demand “particularly from customers in the personal electronics market,” chief financial officer Rafael Lizardi said in a post-earnings call.

Kinngai Chan of research firm Summit Insights Group said further weakness in electronics end markets was likely.

“We clearly see a correction happening in the personal electronics market (PCs, smartphones and TVs) today,” Chan told Reuters.

In the second quarter, Texas Instruments reported net income of $2.29 billion, a 19% increase from a year earlier. Excluding items, it earned $2.45 per share, above analysts’ estimate of $2.12 per share.

Texas Instruments’ revenue rose 14% to $5.21 billion in the quarter, above analysts’ estimate of $4.62 billion, according to Refinitiv data.

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Reporting by Yuvraj Malik in Bengaluru; Editing by Krishna Chandra Eluri

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