Chipmaker Texas Instruments posted its first year-over-year decline in quarterly sales in more than two years amid what company executives characterized as semiconductor cyclicality and weaker demand in China.
“We believe that after 10 quarters of year-on-year growth, the weakness we are seeing is primarily due to the semiconductor cycle,” said Rafael Lizardi, TI’s chief financial officer, in a post-earnings conference call with analysts. “In addition, the macroenvironment — including uncertainty caused by trade tensions — could impact the depth and duration of this cycle.”
Dave Pahl, vice president and head of investor relations, said that demand in China was weaker than in other regions of the world. “We are seeing signs from our customers and the channel that this weakness is primarily from increased caution due to trade tensions,” Pahl said. “We assume that this weakness is a combination of lower local end demand, as well as reduced exports, but we do not have visibility to distinguish between the two.”
Trade tensions between the U.S. and China have been escalating for over a year, with each country imposing tariffs on products exported by the other beginning last March. However, prior to TI’s quarterly report Wednesday, chip companies have generally not reported any major effects of the trade war.
TI (Dallas) reported sales of $3.72 billion for the fourth quarter of 2018, down 1% compared to the fourth quarter of 2017. The company reported a net income for the quarter of $1.24 billion, up 260% from the fourth quarter of 2017, when non-cash charges related to tax law changes adversely affected TI’s profit.
Fourth-quarter sales came in slightly below consensus analysts’ expectations of $3.75 billion. Earnings per share of $1.27 exceeded consensus analysts’ expectations of $1.24 per share.
For the full-year 2018, TI reported sales of $15.8 billion, up 5% compared to 2017. The company reported a net income for the year of $5.6 billion, up 51% compared to 2017.
TI said that it expects sales for the first quarter of this year to be between $3.34 billion and $3.62 billion, in line with analysts’ expectations.
Qr code of ameya360 official account
Identify TWO-DIMENSIONAL code, you can pay attention to