Chipmaker Texas Instruments (TI) forecast first-quarter revenue and profit below Wall Street targets on Tuesday as a wider economic downturn threatens to shake demand even in end-markets that were resilient last year.
The automotive market was the only exception to weak demand, TI Chief Executive Rich Templeton, who will step down in April, said on Tuesday.
Summit Insights Group analyst Kinngai Chan said orders in the automotive market have begun to moderate but haven't turned negative yet.China lifting its COVID restrictions is also expected to help TI catch up to demand in undersupplied industries. TI's revenue fell 3% to $4.67 billion, but beat analysts' average estimate of $4.62 billion, according to Refinitiv data.
The company expects revenue of $4.17 billion to $4.53 billion in the first quarter, the mid-point of which is lower than estimates of $4.41 billion. TI has also been expanding its production capacity to cater to long-term semiconductor demand, a move that is likely to affect its profit margin and free cash flow in the near term.
It expects current-quarter earnings per share between $1.64 and $1.90, the mid-point of which also fell short of expectations.
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