By Dhirendra Tripathi
Investing.com – Texas Instruments stock (NASDAQ:TXN) traded 4.6% higher in premarket Wednesday as the company projected a 14% revenue growth at the top end in the current quarter, a strong forecast given supply constraints and lack of raw materials have meant a rough few months for semiconductor makers.
On the lower side, revenue would still grow around 5%.
"TI's first quarter outlook is for revenue in the range of $4.50 billion to $4.90 billion and earnings per share between $2.01 and $2.29. We expect our 2022 annual operating tax rate to be about 14%," TI's Chairman, President and CEO Rich Templeton said in a statement.
The company had clocked $4.29 billion revenue in the first quarter of last financial year.
TI’s forecast came after the maker of analog and embedded processing chips beat estimates in the fourth quarter. The company has widest reach in the industry, making its results a bellwether for electronics demand.
Revenue in the fourth quarter grew 19% to $4.83 billion, driven by strong demand in industrial and automotive markets. As a percentage of revenue for the year, industrial was 41%, automotive 21% and personal electronics 24% with each of the other segments contributing in single digit.
“We see good opportunities in all of our markets, but we place additional strategic emphasis on industrial and automotive,” Dave Pahl, TI’s vice president and head of investor relations, told analysts in a conference call.
Customers in these two segments are turning to analog and embedded technology to make their end-products smarter and more efficient, which will drive faster growth in chip demand to these segments, he said. The company said it will boost its chip-making capacity to cater to the segments.
Fourth-quarter net income of $2.27 per share beat expectations of $1.95.