Texas Instruments offered some relief that a global slowdown in microchip demand wouldn’t be as long as dreaded, posting quarterly profit and income that beat Wall Street estimations on Tuesday.
Shares of the corporate surged 6.4% to $127.70 in extended trading and have been on track to resume at a record high on Wednesday.
The firm had earlier warned that the slowdown might last some more quarters, as China’s economy cools and companies face the consequence of a prolonged U.S.-China trade conflict.
When asked if the trade spat was impacting the company’s capability to conduct business in China, Chief Financial Officer Rafael Lizardi said, “No, under no circumstances.”
The market was further inspired by the figures from one of the first chip manufacturers to report earnings for the quarter, as there were uncertainties encircling demand resulting from higher tariffs and the fallout from China’s Huawei Technologies.
Texas, whose broad list of products makes it a proxy for the chip sector, said it anticipated third-quarter income to be between $3.65 billion and $3.95 billion. The firm further estimated a profit of between $1.31 and $1.53 a share.
Analysts on average were projecting revenue of $3.83 billion and gains of $1.38 a share, in accordance with IBES data from Refinitiv.
Chan; however, expressed worries about the renewed uneven demand in industrial and automotive sectors because of slowing growth in China.
Sales from industrial and automotive industries, its fastest-rising areas, together accounted for over half of the company’s income in 2018.
Net earnings dropped to $1.31 billion, i.e., $1.36 a share, in the second quarter ended June 30 from $1.41 billion, i.e., $1.40 a share, a year ago.