Closing Bell: Texas Instruments, GM & Lockheed Martin All Drop on Disappointing Results

On this episode of Stock Movers:

Listen for comprehensive cross-platform coverage of the US market close as heard on Bloomberg Television, Bloomberg Radio, and YouTube with Romaine Bostick, Scarlet Fu, Carol Massar and Tim Stenovec.

- Texas Instruments (TXI), a key chipmaker for producers of cars and factory equipment, declined in late trading after giving a revenue forecast that fell short of the most bullish estimates. Revenue will be $4.45 billion to $4.8 billion in the third quarter, the company said in a statement Tuesday. Though the average analyst estimate was $4.57 billion, some projections reached $4.8 billion. Profit in the period will be roughly $1.48, the company said, slightly below the average estimate.The outlook raises concern that a resurgence in spending, particularly among automotive and industrial customers, isn’t arriving as quickly as hoped. Many buyers had been holding off on orders while they worked through a stockpile of existing inventory. Texas Instruments also said that its forecast “does not include changes related to recently enacted US tax legislation.” Capital spending, meanwhile, grew more than expected last quarter.

- Lockheed Martin (LMT) shares dropped after it caught investors off guard with $1.6 billion in charges and a possible tax hit that sent its stock tumbling, the latest setback for the defense giant whose popular F-35 jet faces criticism over cost overruns and delays. The company’s shares plunged more than 9% on Tuesday - the biggest drop since January - after the world’s largest defense contractor reported earnings that missed analyst estimates and lowered its outlook for the year. At issue, the company said, were program losses that included a classified aeronautics program, and separate helicopter development efforts for the Canadian and Turkish governments. It also flagged $169 million of charges related to losing out on the US Air Force’s F-47 fighter jet contract that went to Boeing Co., and other newly identified risks. Lockheed also cautioned it faces a potential $4.6 billion in additional taxes owed after an accounting change, although it is contesting the matter with the Internal Revenue Service.

- GM (GM) shares slid after it said it suffered a $1.1 billion profit hit from Donald Trump’s tariffs and revealed no plan for a near-term fix to return to pre-tariff profit levels.The Detroit-based automaker said Tuesday it earned $2.53 per share on an adjusted basis, above the Bloomberg consensus forecast of $2.33 but short of the $3.06 it made a year ago. GM’s profits also suffered from higher warranty costs and a buildup in inventory of electric vehicles, which are set to lose federal subsidies under Trump’s recently passed budget bill. GM’s results showcase the difficulty automakers face to maintain profits in an environment that newly penalizes globally integrated parts supply chains and cross-border vehicle sales. Even though the automaker beat profit expectations, earnings in its all-important US business suffered from import duties on vehicles made in China, Mexico and South Korea.

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