Chipmaker Texas Instruments late Tuesday trounced Wall Street's targets for the first quarter. But it warned that disruptions from Covid-19 outbreaks in China would impact its second-quarter results. TXN stock fell in extended trading.
The Dallas-based company earned $2.35 a share on sales of $4.91 billion in the March quarter. Analysts polled by FactSet had expected TI earnings of $2.18 a share on sales of $4.74 billion. On a year-over-year basis, TI earnings rose 26% while sales climbed 14%.
TI's results were fueled by growth in chips for industrial and automotive markets, Chief Executive Rich Templeton said in a news release.
For the current quarter, Texas Instruments forecast earnings of $2.05 a share on sales of $4.5 billion. That's based on the midpoint of its guidance. Wall Street had predicted TI earnings of $2.27 a share on sales of $4.94 billion.
TXN Stock Falls After Report
"This outlook comprehends an impact due to reduced demand from Covid-19 restrictions in China," Templeton said.
In after-hours trading on the stock market today, TXN stock sank 4.3% to 161.26. During the regular session Tuesday, TXN stock fell 3.2% to close at 168.44. It was a brutal day overall for stocks.
Texas Instruments makes analog and embedded processing chips for markets such as industrial, automotive, personal electronics, communications equipment and enterprise systems.
TXN Stock In Consolidation Pattern
TXN stock ranks seventh out of 44 stocks in IBD's semiconductor manufacturing industry group, according to IBD Stock Checkup. It has a decent IBD Composite Rating of 84 out of 99. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
For the past 27 weeks, TXN stock has been in a consolidation pattern with a buy point of 202.36, according to IBD MarketSmith charts. The buy point is 10 cents above its all-time high of 202.26, reached on Oct. 25, based on IBD trading principles. TXN stock retreated as much as 20% from that high during the recent stock market correction.
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