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Texas Instruments’ stock slips as outlook overshadows earnings beat


Texas Instruments Inc. shares fell in the extended session Tuesday after the chip maker’s outlook overshadowed its earnings beat.

Texas Instruments
TXN,
+1.19%

shares fell 2% after hours following a 1.2% gain to close the regular session at $186.08.

The company reported second-quarter net income of $1.72 billion, or $1.87 a share, compared with $2.29 billion, or $2.45 a share, in the year-ago period. Revenue declined to $4.53 billion from $5.21 billion in the year-ago period, as analog revenue fell 18% to $3.28 billion and embedded revenue rose 9% to $894 million.

Analysts surveyed by FactSet had forecast earnings of $1.76 a share on revenue of $4.37 billion.

Analysts had forecast sales of analog electronics, which convert real-world data such as sound or temperature into digital data, to fall to $3.62 billion, and sales of embedded processors, which take that digital data and use it to perform specific tasks, to decline 0.6% to $815.7 million.

The company, however, forecast third-quarter earnings of $1.68 and $1.92 a share on revenue of $4.36 billion to $4.74 billion, while analysts had estimated third-quarter earnings of $1.91 a share on revenue of $4.59 billion.

Year to date, Texas Instruments’ stock price has gained 13%, while shares of another major auto-chip supplier, NXP Semiconductors NV
NXPI,
+4.27%
,
which reported late Monday, have rallied 39%.

In comparison, the S&P 500
SPX,
+0.28%

has gained 19%, the tech-heavy Nasdaq Composite Index
COMP,
+0.61%

has rallied 35% and the PHLX Semiconductor Index
SOX,
+1.70%

has soared 48% over that time.



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