Chipmaker TI forecasts dour fourth-quarter estimates on slowing demand

Chipmaker Texas Instruments on Tuesday forecast quarterly revenue and profit below estimates, anticipating slowing orders as consumer electronics makers and retailers grapple with bloated inventory, sending its shares down 5 per cent.

Hit by red-hot inflation, consumers have pulled back on non-discretionary spending including on personal electronics, which has left businesses, stocking up ahead of the holiday season, with piled up inventories.

Texas Instrument's strong segments such as industrials are also starting to show signs of weakness as customers become cautious amid a deepening macroeconomic crisis.

"During the quarter we experienced expected weakness in personal electronics and expanding weakness across industrial," said TI Chief Executive Officer Rich Templeton.

Shares of the Dallas, Texas-based company fell to US$154 in extended trading. They have declined about 14 per cent so far this year, hurt by the slowdown in the PC and smartphones markets.

The company forecast fourth-quarter revenue in the range of US$4.40 billion to US$4.80 billion, compared with estimates of US$4.93 billion, per Refinitiv data.

It forecast profit between US$1.83 and US$2.11, below estimates of US$2.21.

However, the company reported a 13 per cent rise in third-quarter revenue to US$5.24 billion. Analysts on average had estimated revenue at US$5.14 billion.

Excluding items, it earned US$2.45 per share, beating estimates of US$2.39.