Shares in Texas Instruments (NASDAQ:TXN) rose in premarket trading after the chipmaker reported third-quarter income that topped analysts' expectations.
Earnings per share came in at $1.47 on revenue of $4.15 billion in the three months ended on Sept. 30, the manufacturer of semiconductors that help power electronic devices said. Analysts polled by Investing.com had anticipated per-share profit of $1.38 on sales of $4.12 billion.
In a post-earnings call, Chief Executive Haviv Ilan said the company is benefiting from "momentum" for electric vehicles in China, adding "our content is growing there" and "really drove the growth in the third quarter."
Sales of Texas Instruments' automotive-focused products expanded in the upper-single-digits sequentially, Ilan noted. Analysts also said the automotive unit's returns counterbalanced weakness in Texas Instruments' industrials division.
For the current quarter, Texas Instruments guided for earnings per share of between $1.07 and $1.29, or $1.18 at the midpoint, and revenue of $3.7 billion to $4 billion. That compared with estimates for earnings of $1.34 a share on revenue of $4.07 billion.
In a note to clients, analysts at Bernstein flagged they are "hesitant to build a bull case" around Texas Instruments' shares based solely on the strength of its electric vehicle business in China, saying "it's really not that big, and the rapid increase in recent quarters carries sustainability concerns." They added that they see "another substantial reset to numbers both on the top line and gross margins."
"We love [Texas Instruments] as a company, but we do question what one is playing for here," the analysts wrote. "But for now clearly nothing bad is sticking to their pan."
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. The figures come as markets are closely eyeing results from global semiconductor firms in attempt to gauge the outlook for chip demand.
Shares in chipmakers slumped last week after ASML (AS:ASML), Europe's biggest tech firm, projected lower-than-expected 2025 sales and bookings. But the sector later rebounded on a forecast-topping spike in quarterly profit from Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker and a major producer of advanced chips used in artificial intelligence applications.
