Texas Instruments falls on soft guidance; Goldman reiterates Sell rating

Investing.com -- Texas Instruments reported third-quarter revenue and current-quarter guidance that fell short of Wall Street estimates as weaker industrial demand for chips broadened, weighing on performance.

Texas Instruments Incorporated (NASDAQ: TXN) shares fell 5.5% in pre-market Wednesday trade following the report.

Texas Instruments reported adjusted EPS of $1.85 on revenue of $4.53B. Analysts polled by Investing.com anticipated EPS of $1.82 on revenue of $4.57B.

In industrial, its largest end market, demand weakness "broadened", the company said.

Analog revenue, which makes up the bulk of overall revenue, fell 16% year-on-year in the quarter, while embedded processing gained 8%.

Texas Instruments guided fourth-quarter revenue in the range of $3.93B to $4.27B, and EPS between $1.35 and $1.57. That was below estimates for EPS of $1.76 a share on revenue of $4.5B.

"We like TXN’s exposure to long-life industrial, auto, comms verticals (~72% sales) but remain on the sidelines as capacity investments exert sustained pressure on margins in the near/medium-term," Oppenheimer analyst Rick Schafer wrote.

Goldman Sachs analyst Toshiya Hari reiterated a Sell rating and a $137 per share price target on TXN.

"We would consider turning more constructive on the stock if/when signs of an improvement in TI’s competitive footing begin to emerge."

Additional reporting by Senad Karaahmetovic

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