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Texas Instruments Beats Q1 Views Despite Apple iPhone ‘Shortfall’

Texas Instruments ( TXN ) joined NXP Semiconductors ( NXPI ) and Cirrus Logic ( CRUS ) late Wednesday, weathering an  Apple ( AAPL ) iPhone shipment dip by bolstering embedded-processing sales to top Wall Street’s first-quarter expectations. On Thursday, at least eight analysts boosted their price targets on Texas Instruments stock. On the stock market today , Texas Instruments shares were up a fraction intraday. The stock has been on a run since Jan. 15, climbing 25% after a two-week fall. NXP and Cirrus Logic stocks split the difference in Thursday trading, up 0.2% and down 2.1%, respectively. Skyworks Solutions ( SWKS ) and Qorvo ( QRVO ) were up 1.6% and 0.3%, respectively, after Apple reported its first ever year-over-year iPhone shipment decline late Tuesday. For the first quarter, Texas Instruments reported $3.01 billion in sales and 65 cents earnings per share, down 5% and up 7%, respectively, vs. the year-earlier quarter. Both measures topped the consensus of 36 analysts polled by Thomson Reuters for $2.98 billion and 62 cents. Analog sales — which includes power management chips used in the iPhone 6S — declined 8% year over year to $1.88 billion. The drop was expected MKM analyst Ian Ing wrote in a research report. Apple comprised 15% of Texas Instruments’ 2015 sales. “While the year-over-year shortfall in smartphones was $150 million, the inclusion of (a) weak PC (segment) results in an even greater shortfall,” he wrote in a research report. “The year-over-year revenue gap is expected to decline somewhat in June, but still be significant.” Embedded-processing revenue grew 8% vs. the year-earlier quarter to $729 million in sales. Sales of custom integrated circuits drove a 10% year-over-year decline in Texas Instruments’ other sales. Texas Instruments’ current-quarter guidance for $3.07 billion to $3.33 billion in sales and 67 cents to 77 cents EPS would be flat and down 1%, respectively, on a year-over-year basis. But that outlook topped analyst views for $3.18 billion and 71 cents at the midpoints. Credit Suisse analyst John Pitzer noted that Texas Instruments is “consistently executing on consistent execution.” He boosted his price target on Texas Instruments stock to 65 from 60, but reiterated his neutral rating. During Q1, Texas Instruments hit a record 60.6% gross margin. Pitzer and RBC analyst Amit Daryanani expect that to continue, driven by better manufacturing gains, improved mix and impressive execution. Daryanani upped his price target on Texas Instruments stock to 68 from 65, but kept his outperform rating.

Cirrus Logic Beats, But Apple iPhone Slump Dings Skyworks, Qorvo

Cirrus Logic ( CRUS ) stock dodged Apple ’s ( AAPL ) tornado Wednesday, while shares of Apple suppliers Broadcom ( AVGO ), Qorvo ( QRVO ) and Skyworks Solutions ( SWKS ) fell on Apple’s first ever year-over-year decline in iPhone sales. In midday trading on the stock market today , Cirrus Logic stock bounded 6.5%, near 36, after the chipmaker late Tuesday posted fiscal Q4 metrics that declined vs. the year-earlier quarter but still topped Wall Street expectations. The results were similar to fellow Apple supplier NXP Semiconductors ( NXPI ), which late Monday reported consensus-topping Q1 earnings that also fell year over year. Cirrus Logic’s current-quarter guidance lagged analyst consensus on softening iPhone sales . Late Tuesday, Apple said that it had shipped 51.19 million iPhones in the March quarter, down 16% from the year-earlier quarter. Needham analyst Rajvindra Gill cut estimates on Apple suppliers Skyworks and Qorvo ahead of their earnings reports, slated for after the market close Wednesday. Apple’s June-quarter revenue guide for $41 million to $43 million implies 38 million iPhone shipments, Gill wrote in a research report. Analyst consensus currently estimates 44 million iPhone shipments for the June quarter, he wrote. “While we expect iPhone unit shipments to grow seasonally beyond the June quarter, we believe overall shipment levels are likely to be below our prior estimates,” he wrote. He cut his price targets on Skyworks and Qorvo stocks to 70 and 50 from 77 and 54, respectively, but kept his buy ratings. But Gil retained his buy rating and 50 price target on Cirrus Logic stock. Massive Opportunity Outside Apple Cirrus Logic reported $232 million in sales for the quarter that ended March 26 and 38 cents earnings per share ex items, down a respective 9% and 42% vs. the year-earlier quarter. The consensus of nine analysts polled by Thomson Reuters called for $226.2 million and 21 cents. Cirrus Logic wrapped up fiscal 2016 with $1.2 billion in sales and $2.40 EPS minus items, topping Wall Street for $1.16 billion and $2.22. Sales climbed 31% but EPS fell 10%. On a year-over-year basis, portable audio product sales — which would include mobile — fell 11% in fiscal Q4 but rose 34% in fiscal 2016. For the current quarter, Cirrus Logic expects $220 million to $250 million in sales, which at the midpoint would be down 17% and missing expectations for $258 million. But Cirrus Logic is gaining content at Apple, “thus insulating it from potential unit shipment declines,” Gill wrote. Outside Apple, he estimates that Cirrus Logic’s total addressable digital solutions market could reach $420 million over the next four years, up from just $21 million. Besides Skyworks and Qorvo, fellow Apple supplier Texas Instruments ( TXN ) is also slated to post financials late Wednesday. Shares for the three companies were down a respective 1.5%, 2% and fraction midday Wednesday. For fiscal Q2, the consensus of 25 analysts expects Skyworks to report $775.6 million in sales and $1.24 EPS minus items, up a respective 2% and 8% year over year. Wall Street calls for Qorvo to report $600 million in sales and 92 cents EPS minus items for its fiscal Q4, and $2.6 billion and $4.26 for its fiscal 2016. Across the board, every metric would fall vs. the year-earlier period. Texas Instruments is expected to wrap Q1 with $2.98 billion in sales and 62 cents EPS, down 5% and up 2%, respectively.

HTC Vive Gutted: Micron Chips Stomp Facebook’s Oculus Rift

HTC Vive pummels Facebook ( FB )-owned Oculus Rift in terms of memory, but both tapped Apple ( AAPL ) supplier Texas Instruments ( TXN ) to lead their virtual reality headsets, teardowns from iFixit show . On Tuesday, iFixit unveiled its “Vive-section,” gutting HTC’s VR device to discover four Texas Instruments chips, including a variant on the 16-channel LED driver discovered inside the Rift. But the devices diverge largely on memory. Micron Technology ( MU ) supplies four Vive chips accounting for 72 megabits of flash memory vs. a single Winbond 64-MB chip supplying memory for the Rift. Vive and Rift both employ STMicroelectronics ( STM ) for an ARM-based microcontroller, and the former added in an STM transceiver for speed data transmission. Both also use a Toshiba converter. C-Media supplied an audio controller for the Vive, whereas Oculus tapped Apple supplier Cirrus Logic ( CRUS ) for the Rift audio codec. HTC chose  InvenSense ( INVN ) for its two gyroscope/accelerometer combos, vs. a Bosch Sensortec inertial sensor inside the Rift. HTC also added three NXP Semiconductors ( NXPI ) microcontrollers and a Broadcom ( AVGO ) Bluetooth smart system-on-a-chip. Nordic Semiconductor provided Bluetooth for the Rift. After broadly falling 1.3% Monday on Wall Street, IBD’s 41-company Electronic-Semiconductor Fabless industry group was up nearly 2% in afternoon trading on the stock market today . Micron stock was up more than 9.5%, after rival SK Hynix reported Q1 sales and earnings that fell sequentially and year over year in a tough DRAM (dynamic random-access memory) PC environment. NXP stock was up 4.5% after topping Q1 earnings views late Tuesday and ahead of Apple’s fiscal Q2 report late Tuesday. On Monday, NXP stock fell 1.2% on after an iFixit teardown showed Apple included Intel ( INTC ) and Broadcom inside its Retina MacBook 2016, but not NXP. Shares of fellow Apple suppliers InvenSense, Cirrus Logic and Broadcom were up a respective 4.5%, 2% and 1.5%. STMicroelectronics stock was up nearly 3%, and Texas Instruments stock was up a fraction.