Texas Instruments Inc. shares rose in the extended session Tuesday after the chip maker reported a big earnings beat for the quarter and an outlook that was mostly above Wall Street estimates.
Texas Instruments
TXN,
shares rose 4% in after-hours trading, following a 1.5% decline in the regular session to close at $160.84.
For the second quarter, Texas Instruments posted net income of $2.29 billion, or $2.45 a share, compared with $1.93 billion, or $2.05 a share, in the year-ago period.
Revenue rose to $5.21 billion from $4.58 billion in the year-ago quarter, the company said.
Analysts had forecast earnings of $2.13 a share on revenue of $4.65 billion, based on the company’s outlook of $1.84 to $2.26 a share on revenue of $4.2 billion to $4.8 billion.
TI was one of the first chip companies last earnings season that had warned the COVID-lockdowns in China would likely hit many of its customers, and issued a cautious outlook. It was the only major chip maker that saw its Wall Street consensus estimate rise over the quarter.
Read: Are chip stocks set up for a short squeeze, or just more declines? Wall Street doesn’t seem sure
Sales of analog electronics, which convert real-world data such as sound or temperature into digital data, rose 15% to $3.99 billion from the year-ago period, while analysts had forecast $3.66 billion. Sales of embedded processors, which take that digital data and use it to perform specific tasks, rose 5% to $821 million, with analysts expecting $740 million.
For the third quarter, the company expects earnings of $2.23 to $2.51 a share on revenue of $4.9 billion to $5.3 billion, while analysts surveyed by FactSet, on average, had forecast earnings of $2.26 a share on revenue of $4.98 billion.
TI’s stock has also performed better — meaning, hasn’t dropped as much — than other chip-related companies in 2022. As the largest U.S. supplier of chips to the auto industry, TI said back in January it was placing added emphasis on auto and industrial customers, which were the hardest hit by COVID-triggered shortages.
Other U.S. suppliers to the auto industry include Analog Devices Inc.
ADI,
and ON Semiconductor Corp.
ON,
All three stocks have better-than-average performance year to date compared with the PHLX Semiconductor Index
SOX,
which has fallen 29%, while TI has declined 14%, Analog Devices has declined 8%, and ON Semi has fallen 14%.
Meanwhile, the S&P 500 Index
SPX,
has declined 18%, and the tech-heavy Nasdaq Composite Index
COMP,
has dropped 26%.
Late Monday, Netherlands-based NXP Semiconductors NV
NXPI,
topped Wall Street estimates, reporting quarterly revenue of $3.31 billion versus the Street’s consensus of $3.27 billion, as auto chip sales surged 36% to $1.71 billion from the year-ago period. NXP also forecast third-quarter revenue of $3.35 billion to $3.5 billion when analysts had been estimating $3.35 billion.
Stock outperformance of U.S. auto-chip maker stocks hasn’t necessarily extended to foreign suppliers to the auto market.
While Japan’s Renesas Electronics Corp.
6723,
shares are down only down 8% on the Tokyo Stock Exchange, and Murata Manufacturing Co.
6981,
shares are off 15%, NXP shares are down 23% for the year, and shares of Germany’s Infineon Technologies AG
IFX,
are off 40%.
ON Semi will report before the market opens on Aug. 1, while Analog Devices’ earnings are expected in mid-August.
