Texas Instruments will kick off the earnings reporting season for the U.S. chip manufacturers after the market closes. There are muted expectations.
The consensus among analysts is that
Texas Instruments
(TXN) will report June quarter revenue of $4.37 billion, with adjusted earnings per share of $1.76. Analysts expect $4.59 billion of revenue for the current quarter, with adjusted EPS of $1.91.
On Sunday, KeyBanc Capital Markets analyst John Vinh said he expects Texas Instruments will report results for the June quarter that are in line with expectations, or slightly worse. Management could lower its forecasts for the third quarter, he predicted.
There is “continued weakness across all segments with the exception of automotive,” he wrote in a research note, adding there have been “limited signs of a recovery in China.”
The company sells basic building-block chips that go into products in nearly every sector of the economy, from autos and industrial equipment to consumer electronics. Lackluster growth in China, the world’s second-largest economy, would spell trouble for demand.
Texas Instruments stock closed modestly lower at $183.89 on Monday. The stock is up 13% for the past 12 months, compared to the 31% rise for the
iShares Semiconductor exchange-traded fund
(SOXX). The ETF tracks the performance of the ICE Semiconductor Index.
Write to Tae Kim at tae.kim@barrons.com
Read the full article here