Texas Instruments dips after cautioning on slow automotive recovery

Shares of Texas Instruments (TXN) are down 4% to $187.09 in morning trading following the company’s presentation earlier at the Citi Global Technology, Media and Telecommunications Conference. During the event, CFO Rafael Lizardi stated: “So our sense is the recovery is underway. It is happening. It’s broad-based. We’re seeing 4 of our 5 end markets in recovery. The exception of that is automotive. But it’s not quite happening a snapback as maybe some people anticipated or as other recoveries have happened. So that part is a little different. And some of that, we think, could be due to uncertainties at the macro level. Some of that, as I mentioned, is because automotive is not quite recovering like others, but we are in recovery. It’s just not quite like it’s been in other places now. As far as our strategy on that, we remain steadfast on our approach. We have embarked on a multiyear investment on manufacturing and technology. We have several clusters of U.S.-based factories in Sherman, in Richardson, both in Texas and then in Utah. And we are very close to finishing what we call Phase 2, which is the brick-and-mortar. And then when we get to Phase 3, it’s just incremental capacity based on demand. So then the CapEx is just size for what’s needed on a demand basis as opposed to just big chunks in brick-and-mortar. And of course, we’ll continue to focus on the long-term growth of free cash flow per share, which we believe is what drives value for investors long term.”