- Texas Instruments forecasts fourth quarter revenue between $3.70 billion and $4.00 billion, which is below the estimated $4.08 billion.
- The company’s projected earnings per share (EPS) for Q4 are expected to be between $1.07 and $1.29, missing the estimate of $1.35.
- For the third quarter, Texas Instruments reported an EPS of $1.47, which is down from $1.85 year-over-year, but still above the estimate of $1.37.
- The third quarter revenue came in at $4.15 billion, a decrease of 8.4% year-over-year, slightly exceeding the estimate of $4.12 billion.
- Analog revenue for Q3 was $3.22 billion, down 3.9% year-over-year, marginally beating the estimate of $3.17 billion.
- Embedded processing revenue dropped by 27% year-over-year to $653 million, missing the forecast of $659.5 million.
- Other revenues totaled $275 million for Q3, marking a 4.8% year-over-year decline, below the anticipated $295 million.
- Research and development expenses increased by 4.5% year-over-year to $492 million, aligning with estimates.
- The operating profit for the third quarter was $1.55 billion, a decrease of 18% year-over-year, yet above the predicted $1.46 billion.
- Capital expenditure saw a 12% reduction year-over-year, amounting to $1.32 billion, compared to an estimate of $1.27 billion.
- The company holds cash and cash equivalents of $2.59 billion, an increase of 0.9% year-over-year, though under the expected $2.78 billion.
- Texas Instruments maintains its fourth-quarter effective tax rate forecast at approximately 13%.
- Following the weaker-than-expected Q4 sales outlook, shares fell 3% initially, and then dropped by an additional 2% in post-market trading, reaching $190.00.
- In the analyst community, the stock has 13 buy ratings, 20 hold ratings, and 6 sell ratings.
Texas Instruments on Smartkarma
Analysts on Smartkarma, including Baptista Research, have been closely monitoring Texas Instruments‘ performance. In a report titled “Texas Instruments: Is Its China Revival Here To Stay? – Major Drivers,” Baptista Research highlighted the company’s mixed Q2 results. While Texas Instruments reported a 4% sequential increase in revenue to $3.8 billion, there was a significant 16% year-over-year decline. The decline was attributed to decreases in Analog revenue by 11% YoY, Embedded Processing by 31%, and its Other segment by 22% compared to the previous year. However, Texas Instruments remains optimistic for Q3, forecasting revenue in the range of $3.94 billion to $4.26 billion.
In another report by Baptista Research titled “Texas Instruments: Fresh Investments In Manufacturing & Technology & 5 Critical Growth Drivers,” analysts discussed the company’s first quarter of 2024 performance. Despite meeting revenue expectations, Texas Instruments saw a 10% sequential and 16% year-over-year decrease to $3.7 billion. Revenue declined across all end markets as customers reduced inventory levels. Specifically, Analog revenue declined by 14% YoY, Embedded Processing by 22%, and the Other segment by 33% from the previous year. The analysts highlighted the importance of fresh investments in manufacturing and technology as critical growth drivers for Texas Instruments moving forward.
A look at Texas Instruments Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 2 | |
| Dividend | 3 | |
| Growth | 3 | |
| Resilience | 3 | |
| Momentum | 4 | |
| OVERALL SMART SCORE | 3.0 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Analysts reviewing the Smartkarma Smart Scores for Texas Instruments indicate a positive long-term outlook. With a strong momentum score of 4, the company seems to be gaining traction in the market. A solid resilience score of 3 suggests that Texas Instruments can weather economic fluctuations effectively. Additionally, both the growth and dividend scores stand at 3, indicating moderate potential for future expansion and returns for investors. However, the value score of 2 suggests that the stock may not be currently considered undervalued.
Summary: Texas Instruments, a semiconductor design and manufacturing company known for its analog ICs and embedded processors, presents a mixed outlook according to the Smartkarma Smart Scores. While showing strength in momentum, resilience, growth, and dividends, the company’s valuation may not be perceived as attractive at the moment.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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