Texas Instruments Gives Strong Forecast on Automotive Demand

Texas Instruments Gives Strong Forecast on Automotive Demand



Photographer: Daniel Acker/Bloomberg

Texas Instruments Inc. projected revenue for the fourth quarter that will top analysts’ estimates, indicating demand for chips used in cars and personal electronics is rebounding.

Sales will be $3.41 billion to $3.69 billion and profit is expected to be $1.20 to $1.40 a share, the company said Tuesday in a statement. On average, analysts predicted profit of $1.20 a share and sales of $3.35 billion, according to data compiled by Bloomberg.

Sales of chips used in vehicles have risen back to year-ago levels, helped by the reopening of auto plants in North America and Europe, Texas Instruments executives said. Increased consumer spending on home electronics such as smart speakers and televisions has helped boost demand for semiconductors that power those devices. Industrial demand remains mixed, the company said.

Texas Instruments has more than 100,000 customers, which make everything from consumer electronics to space hardware. That breadth makes its earnings and forecasts a proxy for demand across the economy.

“We remain cautious — this economy is not in good shape,” Chief Financial Officer Rafael Lizardi said in an interview. “The long-term secular trends are awesome, but could we hit an air pocket at some point in the next quarter or two or three? Absolutely.”

Texas Instruments reported a large jump in revenue versus expectations in the third quarter by using inventory it had accumulated while keeping factory production high, he said. The company has the cash flow to continue to do that and invest in new facilities and products, he said.

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