The weak future outlook has caused Texas Instruments Incorporated (NASDAQ:TXN) its biggest plunge in the last six months. As per the reports, the company forecasted that its sales and profit would be below analysts’ estimates. The primary reason for this below average performance was weak performance in personal electronics and communications equipment business.
Texas Instruments revealed in a statement that the net income in the second quarter will be 60-70 cents per share while the sales will be between $3.12 billion to $3.38 billion. If it is compared with the analysts’ estimate, one can see that there is a huge difference between both the prices. As per the reports, analysts expected the profit to touch 73 cents per share mark while revenue to touch $3.4 billion mark.
Texas Instruments Incorporated (NASDAQ:TXN) is the biggest manufacturer of analog chips in the world. The company forecasts the demand for all the components that manufacture to remain weak in the coming quarter. Even though it stated that all of its instruments would face a sluggish demand, but its primary focus was on the wireless infrastructure equipment stating that it would face weak demand in the next quarter.
The company doesn’t expect the foreign exchange rate to achieve its normal level in the near future. One of the major platforms, The Bloomberg Dollar Spot Index has gone 18% higher in the past one year. The index mainly tracks the currency against the ten major peers. The chips manufactured by the company are used everywhere from household items to spacecraft equipment. Due to this fact, company’s earnings directly depend on the demand for all such products on the international level. Due to increased dollar value, it has become very difficult for the overseas distributors to maintain the parts equipped with its chips.
It witnessed a sharp fall in stock prices on Thursday which came down 7.7% to $54.24 in the morning session.