Texas Instruments late Tuesday beat Wall Street's targets for the second quarter but disappointed with its earnings outlook. TXN stock fell more than 13% on Wednesday.
The Dallas-based chipmaker earned $1.41 a share on sales of $4.45 billion in the June quarter. Analysts polled by FactSet had expected Texas Instruments to earn $1.36 a share on sales of $4.36 billion. On a year-over-year basis, Texas Instruments sales and earnings both rose 16%.
"Revenue increased 9% sequentially, led by continued broad recovery in industrial," Chief Executive Haviv Ilan said in a news release.
However, for the current quarter, Texas Instruments forecast earnings of $1.48 a share on sales of $4.63 billion. That's based on the midpoint of its guidance. Wall Street was modeling earnings of $1.51 a share on sales of $4.59 billion. In the year-earlier period, TI earned $1.47 a share on sales of $4.15 billion.
On the stock market today, TI stock tumbled 13.3% to close at 186.25.
On July 10, Texas Instruments stock reached a buy point of 220.38 out of a 34-week consolidation pattern, according to IBD MarketSurge charts. But trading volume was light, a sign that the possible breakout lacked conviction.
With its first-quarter report in late April, Texas Instruments returned to growth after nine straight quarters of declining sales and earnings.
Where TXN Stock Ranks Among Chip Stocks
Elsewhere among chip stocks, NXP Semiconductors slid Tuesday after reporting second-quarter results late Monday.
NXP reported better-than-expected Q2 sales and earnings amid a cyclical recovery. Its guidance was above official consensus estimates but below unofficial "whisper numbers," analysts said.
NXP stock ended the regular session Tuesday down a fraction to 228. On Wednesday, it slid 1.4% to close at 224.71.
NXP stock ranks No. 7 out of 31 stocks in IBD's semiconductor manufacturing industry group, according to IBD Stock Checkup.
Texas Instruments ranks third in the group. TXN stock has an IBD Composite Rating of 85 out of 99. IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
