Texas Instruments Tumbles After Slashing Guidance

Texas Instruments plunged -10% in after-hours trading after 3Q earnings missed analysts’ expectations. The company reported a -11.5% drop in quarterly revenue, due to macroeconomic headwinds mounting from the US and China trade war. 

“Net income fell to $1.43 billion, or $1.49 per share, in the third quarter ended Sept. 30, from $1.57 billion, or $1.58 per share, a year earlier. Total revenue for the company, whose broad lineup of products makes it a proxy for the chip industry, fell to $3.77 billion from $4.26 billion,” Reuters noted. 

• 22-Oct-2019 04:01:02 PM – TI REPORTS THIRD QUARTER 2019 FINANCIAL RESULTS AND SHAREHOLDER RETURNS
• 22-Oct-2019 04:01:02 PM – TEXAS INSTRUMENTS INC TXN.O Q3 SHR $1.49
• 22-Oct-2019 04:01:03 PM – TEXAS INSTRUMENTS INC TXN.O Q3 REVENUE $3.77 BLN VS REFINITIV IBES ESTIMATE OF $3.82 BLN
• 22-Oct-2019 04:01:03 PM – TEXAS INSTRUMENTS INC TXN.O Q3 SHR ESTIMATE $1.42 — REFINITIV IBES DATA
• 22-Oct-2019 04:01:03 PM – TEXAS INSTRUMENTS INC TXN.O SEES Q4 SHR $0.91 TO $1.09 INCLUDING ITEMS
• 22-Oct-2019 04:01:03 PM – TEXAS INSTRUMENTS INC TXN.O SEES Q4 REVENUE $3.07 BLN TO $3.33 BLN
• 22-Oct-2019 04:02:37 PM – TEXAS INSTRUMENTS INC- QTRLY REVENUE DECREASED 11% FROM SAME QUARTER A YEAR AGO, AS MOST MARKETS WEAKENED FURTHER

The global semiconductor industry has taken a hit in the last year due mostly to the synchronized global downturn amplified by the trade war. However, semiconductor stocks have been soaring to new highs recently, as traders have been pricing in huge growth potential for 2020. Texas Instruments’ earnings mishap is a wake-up call to the semiconductor space that a repricing event is here as guidance is slashed.