Texas Instruments Shares Fall By Nearly 8%
By Aman Batheja, Fort Worth Star-Telegram, Texas
Oct. 26–Texas Instruments shares tumbled nearly 8 percent Tuesday after the company warned of lower fourth-quarter earnings because it might not be able to meet demand for its products.
The Richardson-based technology company’s shares (ticker: TXN) dropped $2.37 to $28.55 on the New York Stock Exchange.
Much of that drop occurred in after-hours trading Monday, as the stock fell $1.94 once the company released its earnings report in the afternoon.
Despite reporting strong third-quarter earnings, investors focused on the company’s outlook for the fourth quarter of 36 to 40 cents per share of common stock on revenue of $3.425 billion to $3.715 billion, factoring in a deduction of about 3 cents a share for stock-option expenses.
Wall Street expectations, which tend to exclude those expenses, were 41 cents per share for the quarter on revenue of $3.63 billion.
Ron Slaymaker, TI vice president and manager of investor relations, told analysts in a conference call Monday that the lower fourth-quarter outlook was because of tight inventory and unexpected demand in the third quarter. Demand still remained strong, he said.
The company reported $3.59 billion in quarterly revenue and earnings of 38 cents per share of common stock after deducting 3 cents for stock options and 1 cent for higher-than-anticipated taxes in the quarter. Analysts were expecting $3.55 billion in revenue and 40 cents per share in earnings, not factoring in those expenses.
Growth has been especially strong in the semiconductor, wireless and digital-light-processor segments, the company said.
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