By Wallace Witkowski
Texas Instruments Inc. executives said late Tuesday they are placing more emphasis on serving industrial and automotive customers, which have accounted for the hardest hit end markets during the global chip shortage, as sales continued to grow.
On a call with analysts following the release of earnings, David Pahl, Texas Instruments’ /zigman2/quotes/202237907/composite TXN +3.28% head of investor relations, said that the company is placing “additional strategic emphasis on industrial and automotive.” Pahl said that industrial sales made up 41% of revenue for the year, with auto sales making up 21% of sales.
For the year, Texas Instruments reported $18.34 billion in revenue, a 27% annual gain.
“These trends have resulted and will continue to result in growing chip content for application, which will drive faster growth compared to the other markets,” Pahl said. To that end, Pahl said the company continues to add capacity incrementally, as it has every quarter.
While personal electronics accounted for 24% of annual revenue, Pahl said those sales were “down single digits” in the fourth quarter from a year ago.
Kicking off earnings season for U.S. chip makers, Texas Instruments’ results and forecast topped Wall Street expectations. The company posted fourth-quarter net income of $2.14 billion, or $2.27 a share, compared with $1.69 billion, or $1.80 a share, in the year-ago period. Revenue rose to $4.83 billion from $4.08 billion in the year-ago quarter.
Analysts surveyed by FactSet had forecast earnings of $1.95 a share on revenue of $4.43 billion, based on the company’s outlook of $1.83 to $2.07 a share on revenue of $4.22 billion to $4.58 billion.
Texas Instruments said it expects first-quarter earnings of $2.01 and $2.29 a share on revenue of $4.5 billion to $4.9 billion, while analysts on average had forecast earnings of $1.87 a share on revenue of $4.37 billion.
Sales of analog electronics, which convert real-world data such as sound or temperature into digital data, rose 20% to $3.76 billion from the year-ago period, while analysts had forecast $3.5 billion. Sales of embedded processors, which take that digital data and use it to perform specific tasks, rose 6% to $764 million, with analysts expecting $698.5 million.
Texas Instruments shares rallied nearly 4% in after-hours trading. The stock closed the regular session down 2.5% at $173.96.
Over the past 12 months, Texas Instruments’ stock price has advanced 0.6%. In comparison, the S&P 500 index /zigman2/quotes/210599714/realtime SPX +1.73% is up 13%, the tech-heavy Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +2.30% has slipped 0.7%, while the PHLX Semiconductor Index /zigman2/quotes/210598361/realtime SOX +4.42% has risen 8.8% over that time.