Texas Instruments posted first quarter revenue of $4.29 billion, a jump of 29% year over year. The unusually strong first quarter caught analysts a bit by surprise, beating the consensus estimate of about $4 billion.
On Wednesday afternoon’s earnings call, TI CFO Rafael Lizardi linked the growth to the company’s ability to continue investing in its supply capacity even while other companies were cutting back during the pandemic. “When everybody was pulling back, we built through that cycle,” he said in response to an analyst’s question, adding that this helped TI get ready “once demand started returning, and returning pretty quickly as it turned out.”
The strong revenue, which also was up about 5% from the fourth quarter last year, helped the company to post a net income figure of $1.75 billion, with earnings per share of $1.87.
Dave Pahl, head of investor relations at TI, cited strong demand in industrial and automotive markets as factors in the growth in revenue. “The industrial market was up about 20% sequentially and up almost 30% from the year ago,” he said, adding that the automotive sector saw about 25% year-over-year growth as TI helped its customers in that industry to recover from supply chain disruptions.
Pahl also said the personal electronics market was strong for TI in the first quarter, up about 50% year over year, though down about 10% compared to the fourth quarter of 2020.
Meanwhile, TI’s analog business revenue grew 33% year over year, and sales in TI’s embedded processing segment increased 17% over the same stretch.
Building on the first quarter growth story, TI issued a second quarter outlook for revenue to land in the range of $4.13 billion to $4.47 billion. That outlook also seemed to catch analysts off guard, with one calling it “flat” and “below seasonality” during the earnings call. Lizardi, however, responded that the second quarter “will be a strong quarter” for TI.
TI shares dropped 3% in after-hours trades on Tuesday to $184.50.
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