Texas Instruments' Earnings Forecast Reflects Ongoing Semiconductor Slump

Texas Instruments, a leading US semiconductor company, has announced a less than favorable earnings forecast for the upcoming quarter. This forecast is largely influenced by lingering sluggish demand for chips and rising manufacturing costs.

According to the company’s statement, it expects profits to range from 94 cents to US$1.16 per share in the first quarter. The average of this range, US$1.05 per share, falls significantly short of analysts' expectations, which were an average projection of US$1.17. Additionally, sales are anticipated to be between US$3.74 billion and US$4.06 billion, compared to the expected US$3.86 billion.

Much of the electronics industry continues to experience a downturn, which has contributed to Texas Instruments facing nine consecutive quarters of sales declines. The company’s executives have also pointed out that increased manufacturing expenses are impacting profits.

Based in Dallas, Texas Instruments derives a significant portion of its revenue from industrial equipment and vehicle manufacturers. As such, its performance is often seen as an indicator of broader trends in the global economy.

Despite previous optimistic statements three months ago regarding signs of recovery in some of the company’s end markets, the anticipated rebound has not materialized as quickly as investors had hoped.

Following the announcement, Texas Instruments' shares dropped approximately 3 percent during extended trading hours. However, it is noteworthy that the stock has risen about 7 percent in value during the year prior to the close of regular trading.

Texas Instruments, semiconductor, earnings