Please ensure Javascript is enabled for purposes of website accessibility

Why Texas Instruments Shares Rose 11% in April

By Anders Bylund - May 9, 2019 at 4:08PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The chipmaker posted lower sales and earnings, but still exceeded the Street's consensus estimates across the board.

What happened

Shares of semiconductor veteran Texas Instruments (TXN 1.31%) gained 11.1% in April 2019, according to data from S&P Global Market Intelligence. The company posted a relatively solid fourth-quarter report last month, beating analyst estimates across the board.

So what

TI's earnings fell 7% year over year, to $1.26 per diluted share, while revenues dipped 5.2%, to $3.59 billion. Your average Wall Street analyst would have settled for earnings near $1.13 per share on revenues in the neighborhood of $3.5 billion.

A sign that says Texas Instruments outside TI's headquarters in Dallas, Texas.

Image source: Texas Instruments.

Now what

This wasn't a huge surprise, but every little victory counts when the entire semi industry is under constant geopolitical pressure. Moreover, TI is already reporting decent order volumes in the market for 5G wireless products. In the end, CFO Rafael Lizardi expects the lean market prospects to turn more positive across the chip sector, a couple of quarters down the road.

Lizardi said in the fourth-quarter earnings call:

We believe that after 10 quarters of year-on-year growth, the weakness we're seeing is primarily due to the semiconductor cycle. We have just completed our second quarter of year-on-year declines for TI. If you look at history, cycles are always different, but typically the industry would have four to five quarters of year-on-year declines before year-on-year growth resumes.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Texas Instruments Incorporated Stock Quote
Texas Instruments Incorporated
TXN
$169.81 (1.31%) $2.19

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/22/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.