- Signs of customer restocking
- First quarter tops forecasts
- Shares up over 7% after-hours
AI (artificial intelligence) has dominated the chip conversation in recent months but from the sounds made by Texas Instruments (TXN:NASDAQ), the industry could be primed for a far more broadly-based demand bounce as the months roll forward.
The Dallas-based business is the world’s biggest manufacturer of analog semiconductors and embedded processors, doing simple but vital tasks such as converting power to different voltages within electronics. Name any industry and it is a sure bet that you will find Texas Instruments’ kit, from space engineering to automaking, healthcare equipment to consumer electronics.
SIGNS OF RESTOCKING
It makes the $150 billion company arguably ‘the’ industry bellwether, so its optimism for the months ahead has encouraged investors. For the quarter ended 31 March 2024, the company suggested customers have started to resume ordering chips after working through component stockpiles, commentary that came alongside better-than-expected earnings and revenue for the fiscal Q1 2024.
Texas Instruments’ shares jumped more than 7% in after-hours trading, hitting $177.50 levels not seen in almost a year.
QUARTERLY NUMBERS
The chipmaker reported EPS (earnings per share) of $1.20, topping consensus estimates of $1.07, while revenue for the quarter also beat projections reaching $3.66 billion against forecasts of $3.61 billion.
While the company remains wary that early signs of industry confidence might be false indicators, its second quarter guidance offers hope of improvement. For Q2 2024, Texas Instruments expects EPS to be between $1.05 and $1.25 compared to the analyst estimates of $1.16. The company expects revenue to fall between $3.65 billion and $3.95 billion, compared to market expectations of $3.77 billion.
