TI(US:TXN) Zheng Quan Shi Bao·2025-10-22 10:54Core Viewpoint - Texas Instruments (TXN.US) reported better-than-expected Q3 earnings but provided a pessimistic outlook for Q4, leading to a significant drop in its stock price [5][6]. Financial Performance - Q3 revenue reached $4.742 billion, a 14% year-over-year increase and a 7% quarter-over-quarter increase, surpassing market expectations of $4.65 billion [5]. - Operating profit rose 7% year-over-year to $1.663 billion, while earnings per share (EPS) increased 1% to $1.48, slightly below the expected $1.49 [5]. - Revenue from analog chips grew 16% year-over-year to $3.729 billion, while embedded processing chip revenue increased 9% to $709 million, with operating profit for embedded processing declining by 1% to $108 million [5]. Q4 Outlook - The company forecasts Q4 revenue between $4.22 billion and $4.58 billion, with a midpoint below Wall Street's average expectation of approximately $4.5 billion [5]. - Expected EPS for Q4 is around $1.26, with a range of $1.13 to $1.39, compared to Wall Street's average expectation of $1.39 [5]. Market Sentiment - Following the earnings report, Texas Instruments' stock fell over 8%, marking a significant decline similar to a previous drop of 13% due to a pessimistic forecast three months prior [5][6]. - The CEO noted a slowdown in the semiconductor market recovery, attributing it to broader macroeconomic uncertainties and industrial clients' cautious expansion due to potential tariff increases [6]. Industry Outlook - Analysts predict a divergence in the semiconductor industry, with leading companies expected to have a more certain outlook [4]. - Concerns have been raised about a structural contraction in the total addressable market (TAM) for the semiconductor industry, alongside cyclical adjustments [7]. Rating Changes - Bank of America downgraded Texas Instruments' rating from "Neutral" to "Underperform" and lowered the target price from $208 to $190, citing potential demand suppression due to global tariff uncertainties [8]. - The bank also downgraded Intel's rating from "Neutral" to "Underperform," maintaining a target price of $34, highlighting competitive challenges [8].