Texas Instruments posted a decline in quarterly revenue as demand for its chips slipped on economic concerns and it forecast more weakness this quarter.
The maker of chips used in products ranging from consumer electronics to industrial equipment posted a profit of $784 million, or 67 cents per share, up from $601 million, or 51 cents per share, in the year-ago quarter.
Revenue declined to $3.39 billion from $3.47 billion in the year-ago quarter.
After the earnings release, the chip maker's shares fell in extended-hours trade. (Click here to get the latest quotes for Texas Instruments.)
"Across the board we're seeing customers being extremely cautious, very careful about the level of inventory that they hold so giving us very low levels of visibility as to what they'll want to order for the quarter," Texas Instruments Chief Financial Officer Kevin March said in an interview.
The chipmaker's inability to fully utilize its fabrication plants has investors worried about its profitability.
"With the macroeconomic slowdown we're experiencing, and TI's excess capacity - they're only using about 75 percent of their capacity right now - they're going to be under some longer-term pressure to try to fill those fabs," said JoAnne Feeney, an analyst at Longbow Research.
For the fourth quarter, Texas Instruments said it expects earnings of 23 cents to 31 cents per share on revenue of $2.83 billion to $3.07 billion.
"It's definitely light. ... But I don't know how surprising that is given what we've seen in semiconductors and tech recently," said Stacy Rasgon, an analyst at Bernstein Research.