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Semiconductors Fall as Texas Instruments Raises Fresh Alarm

Jeran Wittenstein and Kamaron Leach

(Bloomberg) -- Semiconductor stocks in the U.S. tumbled after Texas Instruments raised alarms with a fourth-quarter revenue forecast that trailed the lowest estimate on Wall Street. Lynx Equity, including analysts KC Rajkumar and Jahanara Nissar, warned clients that the Dallas company’s miss was “not an auspicious start to the earnings seasons for semis.”

Intel Corp., Xilinx Inc., Microchip Technology Inc., Analog Devices Inc. and Nvidia Corp. were among chipmakers that fell more than 2% in after-hours trading. Texas Instruments plunged as much as 11%.

Texas Instruments is the first U.S. semiconductor maker to report earnings for the most recent quarter, at a time when chip stocks have surged on optimism that the U.S.-China trade war will reach a settlement and demand will improve. The Philadelphia Semiconductor Index has gained 39% in 2019.

What will resonate with investors the most, says Lynx Equity, is the revelation that “most markets weakened further,” according to Texas Instruments chief executive officer Rich Templeton in a statement. Lynx expects “the broad-based semi sector to trade down in sympathy tomorrow.”

While expectations for Texas Instruments were relatively subdued, its earnings results are closely watched by investors because of its broad customer base and geographic reach.

(Adds Lynx Equity comments throughout)

To contact the reporters on this story: Jeran Wittenstein in San Francisco at jwittenstei1@bloomberg.net;Kamaron Leach in New York at kleach6@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Scott Schnipper

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