JUMP REPORT

Dallas-based Texas Instruments generates about 95% of its revenue from semiconductors and the remainder from its well-known calculators. Texas Instruments is the world's largest maker of analog chips, which are used to process real-world signals such as sound and power. Texas Instruments also has a leading market share position in digital signal processors, used in wireless communications, and microcontrollers used in a wide variety of electronics applications.

TXN earnings call for the period ending September 30, 2020.

(Bloomberg) — Texas Instruments Inc. projected revenue for the fourth quarter that will top analysts’ estimates, indicating demand for chips used in cars and personal electronics is rebounding.Sales will be $3.41 billion to $3.69 billion and profit is expected to be $1.20 to $1.40 a share, the company said Tuesday in a statement. On average, analysts predicted profit of $1.20 a share and sales of $3.35 billion, according to data compiled by Bloomberg.Sales of chips used in vehicles have risen back to year-ago levels, helped by the reopening of auto plants in North America and Europe, Texas Instruments executives said. Increased consumer spending on home electronics such as smart speakers and televisions has helped boost demand for semiconductors that power those devices. Industrial demand remains mixed, the company said.Texas Instruments has more than 100,000 customers, which make everything from consumer electronics to space hardware. That breadth makes its earnings and forecasts a proxy for demand across the economy.“We remain cautious — this economy is not in good shape,” Chief Financial Officer Rafael Lizardi said in an interview. “The long-term secular trends are awesome, but could we hit an air pocket at some point in the next quarter or two or three? Absolutely.”Texas Instruments reported a large jump in revenue versus expectations in the third quarter by using inventory it had accumulated while keeping factory production high, he said. The company has the cash flow to continue to do that and invest in new facilities and products, he said.The results buttressed projections from some analysts that more orders for chips used in cars and factory machinery would help stem the company’s revenue decline even as the Covid-19 pandemic drags on. Still, others have expressed concerns that the bump is coming from electronics makers stocking up on inventory to guard against future supply disruptions rather than to meet surging demand. Lizardi said Texas Instruments’ customer base is made up of too many small companies for it to know if some are building supplies.Separately, Texas Instruments halted shipments Sept. 14 to Huawei Technologies Co. to remain in compliance with U.S. restrictions on supplying the Chinese company. Huawei accounted for about 2% of Texas Instruments revenue in the third quarter and the U.S. company is assuming that will go to zero in the current period.In the third quarter, net income fell to $1.35 billion, or $1.45 per share, from $1.43 billion, or $1.49, a year earlier, the Dallas-based company said. Revenue was little changed at $3.82 billion, topping analysts’ average estimate of $3.45 billion.Shares gained about 1% in extended trading after closing at $150.83 in New York. The stock has increased 18% this year, lagging behind the Philadelphia Stock Exchange Semiconductor Index, which has jumped 29%.(Updates with CFO comments in fifth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

The company posted better-than-expected third-quarter financial results, driven by a pickup in demand for semiconductor components from both the automotive and consumer electronics segments.

Chipmaker Texas Instruments late Tuesday handily beat Wall Street's sales and earnings targets for the third quarter and guided higher for the fourth quarter. TXN stock rose on the news.