(Reuters) – Texas Instruments on Tuesday forecast second-quarter revenue above Wall Street estimates, signaling stronger demand for its analog semiconductors, sending shares of the chipmaker up 5% in extended trading.
The company’s optimistic forecast comes at a time when demand for consumer electronics is improving after months of decline, indicating that the correction in analog chip inventories may begin to ease.
Global PC shipments rose about 3% in the first three months of 2024 after eight straight quarters of decline, according to data from research firm Counterpoint.
TI chips help power electronic devices and allow digital processors to interface with the “real world.”
“Demand for analog semiconductors is starting to stabilize,” said Summit Insights analyst Kingai Chan.
While analog companies continue to see declining sales, the sector will see more typical seasonal demand in the coming quarters, Chen said.
The Dallas, Texas-based company expects second-quarter revenue of $3.8 billion, compared with analysts’ average estimate of $3.77 billion, according to LSEG.
TI’s earnings are being closely watched as it is the first major U.S. semiconductor company to report quarterly results.
Its semiconductors are also used in applications such as powering industrial automation, and some of its chips are part of circuits used in cars, among other things.
Semiconductor orders fell as the auto market saw higher inventories of electric vehicle (EV) chips due to weaker consumer appetite while industrial weakness continues.
remove advertising
.
TI forecast second-quarter earnings of $1.05 to $1.25 per share, compared with analysts’ estimates of $1.16 per share.
The company reported first-quarter revenue of $3.66 billion, marking its sixth straight quarter of year-over-year decline, according to LSEG. Analysts had expected revenue of $3.61 billion.