Texas Instruments reported its fourth-quarter earnings report on Wednesday, beating analyst earnings and sales estimates. Despite a stronger-than-expected showing, the company’s revenues declined for the first time since 2020, according to The Dallas Morning News.
Fourth-quarter earnings came in at $2.13 per share, beating analyst estimates by 16 cents. Revenues fell 3.4% to $4.67 billion, beating analyst sales projections by $60 million.
The company also issued weak guidance for the upcoming quarter, expected to be $4.17 to $4.53 billion, which could be well under analysts’ consensus estimates of $4.41 billion. Texas Instruments expects earnings to be in the $1.64-$1.90 range, while analysts’ estimates sit at $1.86 for the upcoming quarter.
Texas Instruments estimates are watched closely by the semiconductor industry because the firm has the most extensive customer list and broadest range of products in the $580 billion industry, according to The Dallas Morning News. It is also one of the first big tech companies to report earnings this year, indicating more tough forecasts may lie ahead.
“As we expected, our results reflect weaker demand in all end markets with the exception of automotive,” CEO Rich Templeton said following the report.
Texas Instruments revenues were down 11% sequentially and fell 3% year-over-year in the fourth quarter, according to the company. The company’s stock has traded flat over the past year but has gained nearly 7% already this year.
Texas Instruments CFO Dave Pahl said that a component of weaker demand was customers working to reduce their inventories. He said he predicts the company’s trends in the fourth quarter will continue into the first quarter.
“I’d say that the trends that we saw in the fourth quarter will continue into first, meaning that we expect our end markets to decline with the exception of automotive,” Pahl said.
As previously reported by The Dallas Express, the company recently named Haviv Ilan as its new CEO. Ilan is expected to take over the company on April 1. Current CEO Templeton will continue as chairman.
One analyst believes it is only a matter of time before a correction occurs.
“The industry has been undergoing a broader-based inventory correction starting late in the third quarter last year,” said KeyBanc Capital Markets analyst John Vinh to The Dallas Morning News. “On average these corrections typically last four to five quarters, which would imply we bottom probably mid-year.”
