Texas Instruments (NASDAQ:TXN) delivered stronger-than-expected fourth-quarter earnings and revenue, but its cautious guidance for the current quarter overshadowed the results, leading to a more than 4% drop in premarket trading.

For the quarter, the company reported earnings of $1.30 per share on revenue of $4.01 billion, surpassing analyst expectations of $1.21 per share and $3.9 billion in sales. Despite this solid performance, investors were unsettled by weaker forward-looking projections.

Chief Executive Officer Haviv Ilan highlighted significant challenges in the company's key automotive and industrial segments during the post-earnings call. Automotive chip sales faced "significant weakness," with slower-than-expected growth in China compared to the previous quarter. Meanwhile, the industrial division, responsible for chips used in factory automation, experienced "modest sequential declines," reflecting softening demand in key markets.

For the first quarter, Texas Instruments provided a subdued outlook, projecting earnings per share between $0.94 and $1.16 and revenue ranging from $3.74 billion to $4.06 billion. Both figures fall short of market expectations, with analysts forecasting $1.17 per share in earnings and $3.85 billion in revenue.