Warning: file_exists(): File name is longer than the maximum allowed path length on this platform (260): C:\zpanel\hostdata\zadmin\public_html\forexbr_com_br/wp-content/cache/supercache/www.forexbr.com.br/2019/10/21/earnings-results-texas-instruments-stock-drops-after-weak-outlook-drags-on-chip-sector-after-hours/meta-wp-cache-3304f458ff59a57847865baabe1d3883.php in C:\zpanel\hostdata\zadmin\public_html\forexbr_com_br\wp-content\plugins\wp-super-cache\wp-cache-phase2.php on line 71 Earnings Results: Texas Instruments stock drops after weak outlook, drags on chip sector after hours – Forex Brasil
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Earnings Results: Texas Instruments stock drops after weak outlook, drags on chip sector after hours

Texas Instruments Inc. shares dropped in the extended session Tuesday after the chip-maker’s outlook fell well beneath Wall Street estimates, and other chip-maker stocks took an after-hours hit.

Texas Instruments TXN, -1.80% shares dropped 9.4% after hours, following a 1.8% decline in the regular session to close at $128.57.

The company said it expects fourth-quarter earnings of 91 cents to $1.09 a share on revenue of $3.07 billion to $3.33 billion, down from $3.72 billion in the fourth quarter of 2018. Analysts surveyed by FactSet expect $1.28 a share on revenue of $3.59 billion.

Texas Instruments Chief Financial Officer Rafael Lizardi blamed the outlook on ongoing trade uncertainties with China and customers holding back purchases.

“Our sense is that customers are just far more cautious than they were certainly a year ago, but even 90 days ago, and many of them talk about the caution,” Lizardi said.

“They mention the trade tensions that we know have been happening, and have been kind of accumulating over the last three or four quarters, and the consistency of that breadth of weakness supports that this is a macro situation that is driving the further weakness that we’re seeing,” the CFO told analysts.

Analysts, however, kept on pressing for more details of the outlook, and Lizardi addressed the frustration, stressing the weakness was broad-based.

“I can sense that you collectively are unsatisfied with our answers and I understand that,” Lizardi told analysts. “We have close to 100,000 different customers and we still have about 100,000 different products. It’s difficult to pinpoint any one thing.”

Customers “become more cautious and they pull back, and we are at the very end of a long supply chain, and when the ones at the very front pull back, it becomes a traffic jam,” said Lizardi.

“So our sense is that is what’s happening in the marketplace, but we’ll see what other companies will report over time and we’ll get a clear picture over the next several weeks, and really quarters, because this thing, we’ve been in it for now four quarters, and it’s going to be longer than that,” the CFO told analysts

The company reported third-quarter net income of $1.43 billion, or $1.49 a share, compared with $1.57 billion, or $1.58 a share, in the year-ago period. Revenue declined to $3.77 billion from $4.26 billion in the year-ago quarter, marking the fourth quarter in a row of declining revenue.

Analysts surveyed by FactSet had forecast earnings of $1.42 a share on revenue of $3.82 billion.

Shares of other chip companies also fell after hours. Intel Corp. INTC, -0.23% shares fell 2%, with the chip giant reporting earnings Thursday.

ON Semiconductor Corp. ON, -1.08% shares fell 4%, Nvidia Corp. NVDA, -0.20% shares declined 2.5%, while Advanced Micro Devices Inc. AMD, -1.62% slipped 1.8% and Micron Technology Inc. MU, -1.24% shares fell 2.2%.

Shares of Skyworks Solutions Inc. SWKS, -1.03% fell 3.1% and Taiwan Semiconductor Manufacturing Co. TSM, +1.28% declined 1.4%.

Qualcomm Inc. QCOM, -0.65% shares shed 1.6%, and Broadcom Inc. AVGO, -0.73% shares fell 2.2%.

The PHLX Semiconductor Index SOX, -0.77% closed down 0.8% Tuesday, and is up 39% for the year, compared with a nearly 20% rise in the S&P 500 index SPX, -0.36% and a 22% gain in the tech-heavy Nasdaq Composite Index COMP, -0.72%.