Reflecting On Analog Semiconductors Stocks’ Q3 Earnings: Texas Instruments (NASDAQ:TXN)
Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Texas Instruments (NASDAQ:TXN) and the best and worst performers in the analog semiconductors industry.
Demand for analog chips is generally linked to the overall level of economic growth, as analog chips serve as the building blocks of most electronic goods and equipment. Unlike digital chip designers, analog chip makers tend to produce the majority of their own chips, as analog chip production does not require expensive leading edge nodes. Less dependent on major secular growth drivers, analog product cycles are much longer, often 5-7 years.
The 15 analog semiconductors stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 0.8% while next quarter’s revenue guidance was 3.2% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 6.2% since the latest earnings results.
Texas Instruments (NASDAQ:TXN)
Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ:TXN) is the world’s largest producer of analog semiconductors.
Texas Instruments reported revenues of $4.15 billion, down 8.4% year on year. This print exceeded analysts’ expectations by 0.8%. Overall, it was a strong quarter for the company with a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ EPS estimates.
Texas Instruments Total Revenue
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $192.65.
Founded by Caltech professor Carver Mead and one of his students Chris Diorio, Impinj (NASDAQ:PI) is a maker of radio-frequency identification (RFID) hardware and software.
Impinj reported revenues of $95.2 million, up 46.4% year on year, outperforming analysts’ expectations by 2.5%. The business had a very strong quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ adjusted operating income estimates.
Impinj Total Revenue
Impinj delivered the fastest revenue growth among its peers. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 24.8% since reporting. It currently trades at $166.25.
Named after the founder's ancestral village in present-day Lithuania, Vishay Intertechnology (NYSE:VSH) manufactures simple chips and electronic components that are building blocks of virtually all types of electronic devices.
Vishay Intertechnology reported revenues of $735.4 million, down 13.9% year on year, falling short of analysts’ expectations by 1.8%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations.
Vishay Intertechnology delivered the weakest full-year guidance update in the group. Interestingly, the stock is up 10% since the results and currently trades at $18.75.
With its technology found in common consumer electronics such as TVs and smartphones, Magnachip Semiconductor (NYSE:MX) is a provider of analog and mixed-signal semiconductors.
Magnachip reported revenues of $66.46 million, up 8.5% year on year. This number beat analysts’ expectations by 3.8%. Overall, it was a strong quarter as it also produced a significant improvement in its inventory levels and an impressive beat of analysts’ adjusted operating income estimates.
Magnachip delivered the biggest analyst estimates beat among its peers. The stock is down 7.1% since reporting and currently trades at $4.16.
Founded in the 1950s as Microwave Associates, a communications supplier to the US Army Signal Corp, today MACOM Technology Solutions (NASDAQ: MTSI) is a provider of analog chips used in optical, wireless, and satellite networks.
MACOM reported revenues of $200.7 million, up 33.5% year on year. This result met analysts’ expectations. More broadly, it was a mixed quarter as it also produced revenue guidance for next quarter beating analysts’ expectations but a miss of analysts’ adjusted operating income estimates.
The stock is up 12.9% since reporting and currently trades at $137.87.
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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