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Texas Instruments (TI or TXN), a leading semiconductor company, recently unveiled its Q4 earnings report, presenting a mixed financial picture. The company exceeded expectations for earnings per share (EPS) but fell short in revenue generation. Excluding an unexpected $0.03 benefit, TI reported an EPS of $1.46, which is $0.11 higher than the anticipated $1.35. However, its revenue saw a year-over-year drop of 12.7%, amounting to $4.08 billion, slightly below the forecasted $4.12 billion.
The company's lukewarm performance is attributed to a diminishing industrial market and a sequential downturn in the automotive sector. Looking ahead to Q1, Texas Instruments projected a conservative outlook. Its EPS estimate ranges between $0.96 and $1.16, considerably less than the analyst expectation of $1.40. Sales for the current quarter are also predicted to fall short of expectations, with projections ranging from $3.45 to $3.75 billion, against the anticipated $4.05 billion.
Following this announcement, TXN shares experienced a 3.6% decline in after-hours trading. The December quarter saw a significant 30% year-over-year earnings drop and a 13% decline in sales. Haviv Ilan, Texas Instruments' Chief Executive, acknowledged these challenges, particularly highlighting the difficulties in the industrial and automotive sectors.
Texas Instruments' stock has faced a challenging year, marked by three unsuccessful breakout attempts as per IBD MarketSmith analysis, each triggering a 7%-to-8% stop-loss sell rule. With the company now providing guidance below consensus for both EPS and sales in the upcoming quarter, investors are cautiously observing TXN, balancing their optimism with the realities of the company's current market position and future prospects.