Texas Instruments Inc. (TXN) shares fell in after-hours trading on Tuesday despite beating earnings expectations. The chip maker's outlook for the next quarter overshadowed its positive earnings results.
Q2 Financial Results
In the second quarter, Texas Instruments reported a net income of $1.72 billion, or $1.87 per share. This is a decrease from the $2.29 billion, or $2.45 per share, in the same period last year. Revenue also declined, reaching $4.53 billion compared to $5.21 billion in the year-ago quarter.
While analog revenue fell by 18% to $3.28 billion, embedded revenue saw a 9% increase to $894 million.
Analysts' Expectations
According to analysts surveyed by FactSet, the consensus was for earnings of $1.76 per share on revenue of $4.37 billion. Although the company beat earnings estimates, it missed revenue expectations.
Analysts had predicted a decline in sales of analog electronics to $3.62 billion and a slight decrease of 0.6% in sales of embedded processors to $815.7 million.
Third-Quarter Outlook
Texas Instruments provided its outlook for the third quarter, forecasting earnings per share between $1.68 and $1.92 on revenue ranging from $4.36 billion to $4.74 billion. Analysts had estimated earnings of $1.91 per share on revenue of $4.59 billion for the upcoming quarter.
Stock Performance
Year to date, Texas Instruments' stock price has seen a 13% increase. In comparison, shares of another major auto-chip supplier, NXP Semiconductors NV (NXPI), have surged by 39%, while the S&P 500 has gained 19%. The tech-heavy Nasdaq Composite Index has skyrocketed by 39%, and the PHLX Semiconductor Index has seen a remarkable 48% surge during the same period.
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