Texas Instruments (TXN) is set to kick off the earnings reporting season for U.S. chip manufacturers after the market closes. Analysts have moderate expectations for the company's quarterly results.
Revenue and Earnings Expectations
The consensus among analysts is that Texas Instruments will report revenue of $4.37 billion for the June quarter, with adjusted earnings per share of $1.76. Looking ahead, analysts expect revenue of $4.59 billion for the current quarter, with adjusted EPS of $1.91.
KeyBanc Capital Markets analyst John Vinh anticipates that Texas Instruments' results for the June quarter will be in line with expectations, or possibly slightly worse. He even predicts that management could lower its forecasts for the third quarter. According to Vinh, there is "continued weakness across all segments with the exception of automotive," and he notes that there have been limited signs of a recovery in China.
Potential Impact of Chinese Market
As a company that sells basic building-block chips used in a wide range of products across various sectors, Texas Instruments could face challenges due to lackluster growth in the Chinese market. China, being the world's second-largest economy, plays a crucial role in determining demand for such products.
On Monday, Texas Instruments' stock closed slightly lower at $183.89. Over the past 12 months, the stock has seen a 13% increase, compared to the 31% rise of the iShares Semiconductor exchange-traded fund (SOXX). The ETF closely tracks the performance of the ICE Semiconductor Index.