Texas Instruments’ stock slips as outlook overshadows earnings beat

The company reported second-quarter net income of $1.72 billion, or $1.87 a share, compared with $2.29 billion, or $2.45 a share, in the year-ago period. Revenue declined to $4.53 billion from $5.21 billion in the year-ago period, as analog revenue fell 18% to $3.28 billion and embedded revenue rose 9% to $894 million.

Analysts surveyed by FactSet had forecast earnings of $1.76 a share on revenue of $4.37 billion.

Analysts had forecast sales of analog electronics, which convert real-world data such as sound or temperature into digital data, to fall to $3.62 billion, and sales of embedded processors, which take that digital data and use it to perform specific tasks, to decline 0.6% to $815.7 million.

The company, however, forecast third-quarter earnings of $1.68 and $1.92 a share on revenue of $4.36 billion to $4.74 billion, while analysts had estimated third-quarter earnings of $1.91 a share on revenue of $4.59 billion.

Year to date, Texas Instruments’ stock price has gained 13%, while shares of another major auto-chip supplier, NXP Semiconductors NV
NXPI,
+4.27%,
which reported late Monday, have rallied 39%. In comparison, the S&P 500
SPX,
+0.28%
has gained 19%, the tech-heavy Nasdaq Composite Index
COMP,
+0.61%
has rallied 35% and the PHLX Semiconductor Index
SOX,
+1.70%
has soared 48% over that time.