Leading global semiconductor company, Texas Instruments reported a decline in its revenue and profits for Q4 2024. The decline was partly due to a significant slowdown in demand for its products in the automotive and industrial markets. Despite the slump, the company's shares remained relatively stable in the aftermarket trading.
The revenue for the quarter slipped by 13% to $3.5 billion, largely missing the market expectations. The net income, similarly, decreased by 27% to $1.02 billion. The earnings per share (EPS) came in at $1.12, which was slightly above the consensus estimate.
In addition to the decline in demand, another factor that contributed to the lower revenue and profit was the ongoing semiconductor shortage. This global issue has been affecting various industries, including the automotive and electronic sectors. The shortage has led to increased competition among manufacturers, and Texas Instruments has been no exception.
However, despite the challenging quarter, the management remains optimistic about the company's long-term prospects. They believe that Texas Instruments is well-positioned to navigate the current challenges, thanks to its strong product portfolio and robust customer relationships. The company's strategy of returning cash to shareholders through dividends and share repurchases also remains unchanged.
Looking forward, management expects the revenue for the first quarter of 2025 to be in the range of $3.14 billion to $3.4 billion. The EPS is projected to be between $1.02 and $1.18. While the guidance reflects a bit of uncertainty due to the semiconductor shortage, it also indicates a potential improvement in the company's performance compared to Q4 2024.
In summary, despite facing a sluggish quarter and a challenging external environment, Texas Instruments remains confident in its ability to deliver long-term value to its shareholders. The company's resilience amidst the ongoing global semiconductor shortage and its strong financial position are testaments to its robust business model and strategic direction.