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Texas Instruments Forecast Fails to Inspire

Texas Instruments reported second-quarter results ahead of estimates, but its third-quarter guidance disappointed.

Texas Instruments Inc.  (TXN) - Get Report reported second-quarter results that topped estimates, but failed to impress investors with its guidance for the current quarter.

The Dallas-based company reported second quarter earnings of $2.05 per share compared to analyst estimates of $1.83 per share. Revenue of $4.58 billion also topped estimates of $4.36 billion. 

"Our cash flow from operations of $7.5 billion for the trailing 12 months again underscored the strength of our business model," said CEO Rich Templeton. 

Revenue increased 7% sequentially and 41% year over year thanks to strong demand in the company's industrial, automotive and personal electronics segments.

For the third quarter, TI expects revenue to range between $4.4 billion and $4.76 billion with earnings expected to be between $1.87 per share and $2.13 per share. 

Analysts surveyed by FactSet expect the company to report revenue of $4.59 billion with earnings of $1.97 per share. 

Shares of Texas Instruments fell after the report, as investors appeared to view the guidance as uninspiring. Semiconductor companies have seen strong demand during the economic recovery, but have faced persistent supply chain issues.  Texas Instruments shares fell about 4.5% to $185.49 in after-hours trading. 

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This is the second straight quarter where TI's stock fell following a strong print. 

In April, the company topped analysts' first-quarter earnings and revenue expectations while also reporting strong guidance. 

In the regular session Wednesday, chip stocks were generally higher.

The Philadelphia Semiconductor Index rose 97.80 points to 3,288.75.

Cree  (CREE) - Get Report shares rose $4.85, or 5.5%, to $93.15.

ASML Holding  (ASML) - Get ReportADRs rose $36.95, or 5.4%, to $721.00.

Lam Research  (LRCX) - Get Report shares rose $30.16, or 5%, to $637.25.

The Nasdaq Composite Index rose 133.08 points, or 0.9%, to 14,631.95.