FILE PHOTO: A Texas Instruments Office is shown in San Diego, California, U.S., April 24, 2018. REUTERS/Mike Blake/File Photo
(Reuters) -Texas Instruments forecast second-quarter revenue above Wall Street estimates on Wednesday, betting on robust demand for its analog chips despite widespread economic uncertainty stemming from U.S. tariffs.
The optimistic outlook from TI- the first among major U.S. chipmakers to report results for the March quarter - could help allay some of the concerns over the adverse impact of tariffs on semiconductor companies.
Shares of the company rose more than 6% in extended trading after dropping more than 17% this year as investor anxiety stemming from a worsening macroeconomic outlook weighed on the sector.
The company's strong quarterly forecast is being driven by "cyclical demand recovery and possibly some tariff pull-ins," said Kinngai Chan, a senior analyst at Summit Insights Group.
All of TI's markets grew sequentially with the exception of a seasonal decline in personal electronics, the company said in a statement.
TI's results signal a gradual rebalancing of supply and demand in the analog semiconductor market, as the company works to clear surplus inventory that resulted from customers over-purchasing during the pandemic.
The company expects revenue in the range of $4.17 billion to $4.53 billion for the second quarter, compared with analysts' average estimate of $4.10 billion, according to data compiled by LSEG.
It might still be too early to ascertain the impact of increased levies and escalating Sino-U.S. trade tensions on the company and the broader chip industry due to pending tariff negotiations, said Stifel analyst Tore Svanberg.
"There does not seem to be much of an impact (from tariffs) for now."
TI expects earnings between $1.21 per share and $1.47 per share for the second quarter, compared with analysts' average estimate of profit of $1.23 per share.
Revenue in the first quarter rose 11% to $4.07 billion, beating estimates of $3.91 billion and snapping a nine-quarter streak of sales declines.
(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Tasim Zahid)
