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Published: Jan 23, 2024 04:05PM ET | Updated: Jan 23, 2024 04:31PM ET

Texas Instruments (NASDAQ:TXN) Misses Q4 Analysts’ Revenue Estimates

Analog chip manufacturer Texas Instruments (NASDAQ:TXN) fell short of analysts’ expectations in Q4 FY2023, with revenue down 12.7% year on year to $4.08 billion. Next quarter’s revenue guidance of $3.6 billion also underwhelmed, coming in 11.2% below analysts’ estimates. It made a GAAP profit of $1.49 per share, down from its profit of $2.19 per share in the same quarter last year.

Is now the time to buy Texas Instruments? Find out by reading the original article on StockStory.

Texas Instruments (TXN) Q4 FY2023 Highlights:

• Market Capitalization: $158.8 billion
• Revenue: $4.08 billion vs analyst estimates of $4.13 billion (1.4% miss)
• EPS: $1.49 vs analyst estimates of $1.47 (1.7% beat)
• Revenue Guidance for Q1 2024 is $3.6 billion at the midpoint, below analyst estimates of $4.05 billion
• Free Cash Flow of $776 million, up 75.6% from the previous quarter
• Inventory Days Outstanding: 221, up from 207 in the previous quarter
• Gross Margin (GAAP): 59.6%, down from 66.1% in the same quarter last year

Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ:TXN) is the world’s largest producer of analog semiconductors.

Analog Semiconductors

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.

Sales Growth

Texas Instruments’s revenue growth over the last three years has been unremarkable, averaging 8.2% annually. This quarter, its revenue declined from $4.67 billion in the same quarter last year to $4.08 billion. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions (which can sometimes offer opportune times to buy).

Texas Instruments had a difficult quarter as revenue dropped 12.7% year on year, missing analysts’ estimates by 1.4%. This could mean that the current downcycle is deepening.

Texas Instruments looks like it’s on the cusp of a rebound, as it’s guiding to 21.6% ye