Texas Instruments (NASDAQ:TXN) saw its shares tumble more than 8% in premarket trading on Wednesday after issuing weaker-than-expected guidance for the current quarter, adding to investor unease over the outlook for the analog chip industry as U.S. trade and tariff policies remain uncertain.
For the quarter ended September 30, the semiconductor company reported adjusted earnings of $1.48 per share on revenue of $4.74 billion. Analysts had anticipated $1.49 per share on $4.65 billion in revenue, according to consensus estimates.
For the fourth quarter, TI expects earnings per share to land between $1.13 and $1.39, falling short of Wall Street’s $1.41 forecast. The company projects revenue in the range of $4.22 billion to $4.58 billion, with a midpoint of $4.4 billion, compared to analysts’ $4.51 billion estimate.
“Macro headwinds inflicted by ongoing trade uncertainty is weighing on core auto/industrial demand and preventing the sharper, above-seasonal recovery slope that many had hoped to see with acutely short lead times and a large catalog business […] further murkying visibility,” analysts at BofA Securities including Vivek Arya and Duksan Jang wrote in a note.
The company had already signaled that demand was cooling after an earlier surge tied to new tariffs announced by U.S. President Donald Trump in April, which had driven customers to front-load orders. Finance chief Rafael Lizardi acknowledged that “things did slow down” following that month and that sales “didn’t grow as they normally would have.”
Ahead of Tuesday’s earnings release, analysts at Stifel pointed out that all five of TI’s key end markets — industrial, automotive, personal electronics, enterprise systems, and communications equipment — “exhibited sub-seasonal performance in August, reversing July’s results” when all had shown “above-seasonal billings.” Roughly 70% of TI’s sales depend on these segments.
The company had already warned in July of sluggish recovery in the automotive segment and potential supply chain disruptions tied to tariffs. While recent trade agreements have somewhat softened the impact, TI’s latest guidance signals persistent pressure ahead, with rising production costs and more cautious spending patterns from its end customers.