Texas Instruments soars as Q1 guidance exceeds estimates and CEO touts “a lot of room to go” on industrial recovery
Texas Instruments soared in after-hours trading Tuesday as better-than-expected Q1 guidance outweighed a mediocre set of Q4 results.
The chipmaker sees sales in the current quarter ranging between $4.32 billion and $4.62 billion, the midpoint of which is slightly north of the consensus estimate for $4.42 billion. The outlook for earnings per share of $1.22 to $1.48 also compares favorably to Wall Street’s call for $1.26.
For Q4, sales of $4.42 billion were a tad below the consensus call for $4.43 billion, while earnings per share of $1.27 came in $0.03 light of the Street’s view. However, earnings per share included a $0.06 hit that was not incorporated into the company’s guidance, Texas Instruments said.
Managing expectations has not been Texas Instruments’ strong suit as of late: the stock sank after the firm reported Q3 results because Q4 guidance was weak. And during the conference call that followed Q2 earnings, three separate analysts remarked that CEO Haviv Ilan’s “tone” wasn’t too upbeat despite better-than-expected financials and decent guidance.
This time, the outlook and commentary were all sunshine and rainbows.
“The first-quarter guidance is significantly stronger than seasonal,” remarked Deutsche Bank analyst Ross Seymore. “And if my math is right, it seems like it’s the first time you’ve guided up sequentially since right after the financial crisis 15 years ago, roughly.”
Ilan credited this to a persistent recovery in industrial demand, which accounts for about one-third of the company’s sales.
“Remember that on the industrial market, we still have a lot of room to go when you think about the previous peaks,” he said. “So, if you will, the compare, it’s still easy for industrial to continue to recover.”
And then, of course, there’s AI. Data center revenues are a small but briskly growing part of TI’s business, accounting for 9% of sales for the full year while surging roughly 70% year on year in Q4.
