06:30 AM EDT, 07/23/2025 (MT Newswires) -- Texas Instruments ( TXN ) shares dropped early Wednesday as the semiconductor manufacturer issued a third-quarter earnings outlook below market estimates at the midpoint amid uncertainties related to tariffs and geopolitics, even though its results in the previous three-month period topped expectations.

The company anticipates per-share earnings to come in between $1.36 and $1.60 for the ongoing quarter, Chief Executive Haviv Ilan said in a late Tuesday statement. The guidance range's midpoint of $1.48 is below the current consensus on FactSet of $1.51. Revenue is pegged at $4.45 billion to $4.8 billion, according to Ilan, while the Street is looking for $4.64 billion.

"Tariffs and geopolitics are disrupting and reshaping global supply chains," Ilan said in prepared remarks available on the company's website. The firm is working closely with its customers to support their needs and has the flexibility to "navigate as things evolve," the CEO added.

In a Tuesday client note, Truist Securities said the company's outlook represents a "meaningful disappointment." The brokerage initially expected Texas Instruments' ( TXN ) revenue growth to accelerate in the second half, but the guidance suggests "sub-seasonal sequential growth" and a "step-down" in annual gains.

"It seems (Texas Instruments ( TXN )) realized that a big part of (the second quarter's) strength must have been pull-ins (likely China-based industrial end market customers), and that tariffs are having some cautious influence on demand," Truist said in the note.

Texas Instruments ( TXN ) shares fell nearly 12% in the most recent premarket activity.

For the June quarter, the company's net income jumped 16% year over year to $1.41 a share, ahead of the average analyst estimate of $1.36. Revenue inclined to $4.45 billion from $3.82 billion in the prior-year quarter, surpassing the Street's view for $4.36 billion.

Sales in the chip maker's analog segment advanced 18% to $3.45 billion, while embedded processing climbed 10% to $679 million. Among its end markets, industrial increased in the upper-teens year over year amid recovery across all sectors, while automotive grew by a mid-single digit, according to Ilan.

Personal electronics jumped 25% while enterprise systems and communications equipment logged growth of 40% and over 50%, respectively, Ilan said.