Tuesday, May 4, 2021
Texas Instruments Inc. gave a second-quarter sales forecast indicating the supply pinch in the chip industry is hurting its ability to deliver on continued steady demand.
Company executives faced questions about why they weren’t more bullish about revenue prospects for the current period on a conference call with analysts. Head of investor relations Dave Pahl defended Texas Instruments’ projections, saying it will be a strong quarter.
Inventory levels are lower than the company had targeted and there are extended lead times -- the gap between getting an order and being able to fill it -- for more products, Pahl said. Texas Instruments, which does more than 80% of its manufacturing internally, is working to increase its production capacity and will do that steadily throughout the year, executives said.
“Demand continues to be strong” and is outpacing supply, Chief Financial Officer Rafael Lizardi said on the call.
The Dallas-based company has tens of thousands of products and more than 100,000 customers who make everything from consumer electronics to space rockets. That reach as the largest manufacturer of analog and embedded processing chips makes the company’s results an important indicator of demand across the economy.
Sales will be $4.13 billion to $4.47 billion in the period ending in June, generating a profit of $1.68 to $1.92 a share, Texas Instruments said Tuesday in a statement. On average, analysts predicted profit of $1.68 a share and sales of $4.16 billion, according to data compiled by Bloomberg.
In the first quarter, net income rose to $1.75 billion, or $1.87 per share, from $1.17 billion, or $1.24 a share, a year earlier. Revenue rose 29% to $4.29 billion. That compares with analysts’ average estimate of $4 billion.
Shares fell about 2.5% in extended trading after closing at $190.21 in New York. The stock has kept pace with gains by the Philadelphia Stock Exchange Semiconductor Index this year, rising about 16%.
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