Texas Instruments (TI), a leading player in the analog IC market, reported stronger-than-expected quarterly earnings, though its outlook for the current quarter fell short, reflecting ongoing pressures in the industrial semiconductor sector.

According to Reuters and MarketWatch, TI announced its Q3 results after the market closed on the 22nd. Revenue declined 8% year-over-year but increased 9% from the previous quarter, reaching $4.15 billion. Diluted earnings per share (EPS) came in at $1.47, down from $1.85 a year earlier. Analysts surveyed by FactSet had projected Q3 revenue of $4.12 billion and EPS of $1.38.

TI CEO Haviv Ilan stated in the press release that Revenue decreased 8% from the same quarter a year ago and increased 9% sequentially. Industrial continued to decline sequentially, while all other end markets grew.

According to Bloomberg, CEO Haviv Ilan stated that customers are clearing excess inventory, and the timing is now favorable for an order rebound after eight consecutive quarters of declining revenue.

Looking ahead to Q4 (October-December), TI expects revenue to range between $3.7 billion and $4 billion, with a midpoint of $3.85 billion, and diluted EPS between $1.07 and $1.29, with a midpoint of $1.18. FactSet consensus forecast Q4 revenue of $4.06 billion and EPS of $1.34.

According to a report by Money DJ, Texas Instruments is seen as a bellwether for the semiconductor industry due to its early earnings reports. Additionally, TI is the largest manufacturer of foundational chips for various electronic devices. Although its executives are generally reluctant to provide long-term industry forecasts, investors often use TI’s financial guidance to assess overall industry demand. The company’s largest revenue sources are industrial equipment and automotive manufacturers, which together contribute over 70% of its total revenue.

(Photo credit: TI)