Earnings Results: Texas Instruments’ stock slips as continued capacity buildout amid growing inventory weighs on outlook

by | Jul 25, 2023 | Stock Market

Texas Instruments Inc. shares fell further in the extended session Tuesday after the chip maker’s outlook overshadowed its earnings beat, and the company said it would continue building out capacity even as inventory levels rose. Texas Instruments shares
fell 3.3% in after-hours trading, after closing the regular session Tuesday up 1.2% at $186.08.

Tuesday’s earnings report marked the third consecutive quarter of declining year-over-year profits and revenue at Texas Instruments, and analysts are forecasting another two quarters of the same before an estimated return to growth. That said, analysts on the call questioned whether the company was on the right track in continuing to build out manufacturing capacity while inventories were on the rise. Rafael Lizardi, TI’s chief financial officer, told analysts that inventory grew by $441 million from the prior quarter to $3.7 billion, and days of product inventory grew by 12 over the second quarter to 207 days, as the company shifts to direct sales. “In the big scheme of things, our goal here is to support revenue growth,” Lizardi said. “It’s not, frankly, to optimize short-term flu …

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