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Soft Analog Demand Hurts Texas Instrument's (TXN) Q1 Revenues
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Texas Instrument (TXN - Free Report) reported first-quarter 2024 results, wherein earnings and revenues surpassed estimates but plummeted on a year-over-year basis. The company reported earnings of $1.20 per share, which declined 35% year over year. Revenues were $3.66 billion, which decreased 16% from the year-ago quarter. Softness in the Analog segment, which contributed the most to the total revenues, was the primary reason behind the dismal results.
First-quarter Analog revenues of $2.84 billion represented 77.5% of the total revenues and beat the Zacks Consensus Estimate of $2.69 billion. However, the figure declined 14% from the year-ago quarter.
The company’s Analog segment includes two major product lines — Power and Signal Chain. Its Analog semiconductors, which help manage power in all electronic equipment by converting, distributing, storing, discharging, isolating and measuring electrical energy, are currently low in demand due to widespread weakness across various end markets.
TXN shares have returned 3.4% on a year-to-date basis, underperforming the Zacks Computer and Technology sector’s growth of 8%.
The underlined segment has been suffering from softness in the personal electronics, communication equipment and enterprise systems markets for the past few quarters.
A sequential mid-single-digit decline in the automotive market was another major concern in the first quarter. The industrial market saw an upper-single-digit decline sequentially in the quarter under review.
Although the ongoing digitization of electronics is resulting in growing demand for analog chips, macroeconomic challenges and escalating geo-political tensions have been causing end-market volatility, which does not bode well for the Analog Segment in the near term.
Zacks Rank & Stocks to Consider
Currently, Texas Instrument carries a Zacks Rank #3 (Hold).
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Soft Analog Demand Hurts Texas Instrument's (TXN) Q1 Revenues
Texas Instrument (TXN - Free Report) reported first-quarter 2024 results, wherein earnings and revenues surpassed estimates but plummeted on a year-over-year basis. The company reported earnings of $1.20 per share, which declined 35% year over year. Revenues were $3.66 billion, which decreased 16% from the year-ago quarter. Softness in the Analog segment, which contributed the most to the total revenues, was the primary reason behind the dismal results.
(Read more: Texas Instruments Q1 Earnings Beat, Revenues Fall Y/Y)
First-quarter Analog revenues of $2.84 billion represented 77.5% of the total revenues and beat the Zacks Consensus Estimate of $2.69 billion. However, the figure declined 14% from the year-ago quarter.
The company’s Analog segment includes two major product lines — Power and Signal Chain. Its Analog semiconductors, which help manage power in all electronic equipment by converting, distributing, storing, discharging, isolating and measuring electrical energy, are currently low in demand due to widespread weakness across various end markets.
TXN shares have returned 3.4% on a year-to-date basis, underperforming the Zacks Computer and Technology sector’s growth of 8%.
The underlined segment has been suffering from softness in the personal electronics, communication equipment and enterprise systems markets for the past few quarters.
A sequential mid-single-digit decline in the automotive market was another major concern in the first quarter. The industrial market saw an upper-single-digit decline sequentially in the quarter under review.
Although the ongoing digitization of electronics is resulting in growing demand for analog chips, macroeconomic challenges and escalating geo-political tensions have been causing end-market volatility, which does not bode well for the Analog Segment in the near term.
Zacks Rank & Stocks to Consider
Currently, Texas Instrument carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Arista Networks (ANET - Free Report) , Dell Technologies (DELL - Free Report) and Badger Meter (BMI - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Arista Networks have gained 4.2% in the year-to-date period. The long-term earnings growth rate for ANET is 17.48%.
Shares of Dell Technologies have gained 52.3% in the year-to-date period. The long-term earnings growth rate for DELL is projected at 12%.
Shares of Badger Meter have gained 17.5% in the year-to-date period. The long-term earnings growth rate for BMI is 15.57%.