Image Source: DepositPhotos

Texas Instruments (TXN) dropped to the cellar of the Zacks Rank after reporting Q4 revenues and profits that told the continuing tale of stagnation for the key provider to legacy semiconductor and electronics markets.

Earnings of $1.49 per share surpassed the Zacks Consensus Estimate by 2%, which was within the guided range of $1.35-$1.57.

However, the figure declined 30% year over year and 19.5% sequentially.

TXN reported revenues of $4.08 billion, which lagged the Zacks Consensus Estimate of $4.11 billion. The figure came within management’s guidance of $3.93-$4.27 billion.

Revenues decreased 13% from the year-ago quarter’s level and 10% sequentially.

The year-over-year decline was attributed to weakness across various end markets. The company witnessed sluggishness in its Analog, Embedded Processing and Other segments.

On a sequential basis, Texas Instruments suffered from widespread weakness in the industrial and communication equipment markets.

A sequential decline by mid-single digits in the automotive market was a major concern.

Meanwhile, personal electronics remained flat while enterprise systems grew by low-single digits.

Segments in Detail

Analog: Revenues of $3.12 billion were generated from the segment (77% of total revenues), down 12% from the year-ago quarter’s level. The figure came above the Zacks Consensus Estimate of $3.05 billion.

Embedded Processing: Revenues amounted to $752 million (18% of total revenues), down 10% year over year. The figure lagged the Zacks Consensus Estimate of $826 million.

Other: Revenues totaled $205 million (5% of total revenues). The figure was down 25% from the prior-year quarter’s level and missed the consensus mark of $228 million.

2024 Guidance

For first-quarter 2024, TXN expects revenues between $3.45 billion and $3.75 billion.

The company expects earnings within 96 cents-$1.16 per share.

After these results and guidance, full-year 2024 EPS estimates dropped 16.5% from $6.54 to $5.46, representing nearly a 23% decline from 2023.

And next year's profit projection was also clipped nearly 16%.

TXN shares dropped 5.5% after the report. And they remain sideways for the past year as they fail to participate in the AI revolution.

There will be a time to buy TXN again this year after the sales and profit outlook stabilizes. Until then, watch the Zacks Rank for signs of the turnaround.

More By This Author: