Texas Instruments beat third-quarter profit estimates on Tuesday, helped by a recovery in orders for its analog chips across segments and improving demand from China’s automotive market, sending its shares up 4% in extended trading.
Sales of TI’s semiconductors, which help power electronic devices, have been bolstered by improving orders from smartphone and PC providers, supported by a rebound in end-market demand, reports Reuters.
Revenue from the automotive market also rose upper-single-digits sequentially, CEO Haviv Ilan said on a post-earnings call.
“There is momentum for EVs in China, our content is growing there, and that’s what really drove the growth in the third quarter,” Ilan said. However, some weakness is expected to persist in the remainder of the automotive market, he said.
The company recorded earnings of $1.47 per share for the three months ended Sept. 30, above estimates of $1.37, according to estimates compiled by LSEG.
Third-quarter revenue dropped 8% to $4.15 billion, the smallest decline in seven quarters.
“Bottom line, TI now sees cyclical recovery in the non-industrial end markets and expects the automotive market to continue to grow, driven by EV adoption in spite of the mixed demand from the non-Chinese auto OEMs,” said Summit Insights analyst Kinngai Chan.
The results are closely watched as an indicator of demand across sectors since the company’s chips find widespread application. It is also the first major U.S. chipmaker to report results for the September quarter.
