Texas Instruments Incorporated (NASDAQ:TXN) sold off 6% in early Wednesday trading as markets appear disappointed with the company’s sales numbers and concerned over the outlook.
The company reported Q3 earnings of $2.07/share, slightly ahead of estimates for $2.05, with revenue just behind at $4.64B vs. $4.66B. More alarming may have been Q4 guidance, which had a revenue range of $4.22B to $4.58B, a midpoint of $4.4B vs. expectations of $4.45B.
Texas Instruments is a leading analog semiconductor company, which makes it a key piece in the supply chain challenges of this late-pandemic period. The company spoke on its earnings call about preparing for customers to overbuild and of more select expedited requests from customers, as shortages elsewhere limit their shopping lists.
The company also spoke of increasing their proportion of in-house production to have more control over the supply chain dynamics, with an aim of increasing from their current in-house production level of 80%, which could mean meaningful cap-ex in the future.
Even amidst the sell-off, shares are up 25% year to date, and the company increased its dividend 13% for Q4. The company will go ex-dividend on Friday of this week.