Texas Instruments Inc (TXN.O), Xilinx Inc (XLNX.O) and Lam Research Corp (LRCX.O) posted quarterly results on Wednesday that reassured shareholders concerned about U.S.-China trade tensions, sparking a microchip industry stock rally after hours.
Dallas-based Texas Instruments (TI) missed Wall Street’s estimates for quarterly revenue but beat on profit. Shareholders were fearing worse performance amid warnings of a slowing smartphone market from Apple Inc (AAPL.O). TI also forecast first quarter revenue and profit below estimates.
“People were expecting even worse results. It does not mean everything is behind them …we are still in downturn and what macro does in the next few months and quarters nobody knows,” Stifel, Nicolaus & Co analyst Tore Svanberg said.
Xilinx surged 8 percent in extended trade after the programmable chipmaker’s quarterly results and outlook beat analysts’ expectations.
The company said that communications revenue rose 41 percent, boosted by rollouts and preparation for so-called 5G cell phone networks in South Korea and, to a lesser extent, China and North America.
Lam Research, which makes semiconductor manufacturing equipment, jumped 7.4 percent after the bell following its better-than-expected quarterly results and its declarement of a $5 billion stock buyback authorization.
The semiconductor industry had a tumultuous opening to 2019 with concerns of global tech slowdown with warnings from Samsung Electronics Co Ltd <005930.KS>, Taiwan Semiconductor Manufacturing Co Ltd <2330.TW> and Apple, which earlier this month cut its quarterly sales forecast because of poor iPhone demand in China.
The Philadelphia Semiconductor Index (.SOX) is down 19 percent from its record high in March 2018.
“Shareholders, for recently at least, are probably hoping that cycle starts moving back up in the back half,” said analyst Chaim Siegel from Elazar Advisors.
Texas Instruments Incorporated, (NASDAQ: TXN) was trading -20.92% away from its yearly high level, during the last trading session. The last session’s volume was 10,092,992 compared to its average daily volume of 7.87M shares. The company has its outstanding shares of 969.00M. The Technologystock showed a change of -1.42% from opening and finally closed at $95.49 by scoring -1.17%.