Texas Instruments on Tuesday reported revenue of $3.67 billion for the second quarter, down 9% from the same quarter a year ago. Net income was $1.3 billion.
The company said the reduction was due to “broad-based weakness.” Executives cited a reduction of 6% in analog product revenue and a 16% reduction in embedded processing products compared to a year ago.
This was the third straight quarter of declines for TI. Executives on a conference call said TI has historically over 30 years endured five quarters of declines before seeing a positive quarter.
The impact of the U.S. blacklisting of Huawei and trade talks with China on TI sales was not apparently significant. Sales to China and Huawei “came in fairly normal,” said Dave Paul, head of investor relations.
When the Huawei blacklisting was first imposed, TI stopped shipments to Huawei and then TI restored shipments of “most of the products” when it was apparent that some products were not affected by the ban. “We got back to normal pretty quickly,” he said.
Sales to Huawei are typically 3% to 4% of TI revenues, mostly from communications products and handsets, Paul said. Communications products overall are typically 11% of TI revenues. “We had seen some nice growth in 5G products,” Paul said. “From a regional standpoint, nothing unusual is going on.”
The company said it doesn’t expect to change its relationship with Huawei or other Chinese companies. Asked if there could be difficulties in obtaining supplies for its products due to trade difficulties, CFO Rafael Lizardi said, “It’s too early to tell.”
The company’s stock price jumped about 1.6% in Tuesday trading, closing at $120.07 a share.
TI’s third quarter outlook calls for revenues of $3.6 to $3.95 billion. Lizardi said the company will continue to focus on analog and embedded for its core businesses and will focus on auto and industrial customers primarily.