Texas Instruments Quarterly Forecast Disappoints Investors
Texas Instruments’ quarterly profit forecast failed to meet investor expectations due to weaker demand for analog chips and tariff-related uncertainties. Shares fell sharply in extended trading, while the company anticipates lower earnings and revenue for the upcoming quarter. Read on for more details.
Despite not facing direct tariffs, chipmakers like Texas Instruments are feeling the impact of increased costs and reduced spending by end customers. CEO Haviv Ilan highlighted the challenges posed by tariffs and geopolitical factors, affecting global supply chains.
TI’s third-quarter earnings outlook of $1.36 to $1.60 per share falls below analysts’ projections. Revenue expectations also range lower compared to market estimates. However, the chipmaker exceeded second-quarter sales forecasts.
Other industry players, such as ASML and TSMC, are cautious due to tariff uncertainties impacting revenue growth. Analysts questioned TI’s response to changing orders and revenue trends, attributing some fluctuations to tariff influences.
TI’s strategic investments in manufacturing technology and expansion plans reveal a focus on enhancing productivity and capacity. Analysts speculate on the margin effects of consistent factory loadings and the outlook for gross margin growth in the upcoming quarter.
Despite expectations of improved earnings, TI remains vigilant about potential changes in tax legislation affecting future tax rates. CEO Ilan anticipates temporary tax rate increases followed by a downward trend post-2025.
