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What's in Store for Texas Instruments' (TXN) Q2 Earnings?

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Texas Instruments (TXN - Free Report) or TI is scheduled to report second-quarter 2020 results on Jul 21, after market close. In the last reported quarter, TI delivered an earnings surprise of 22.8%.

For the to-be-reported quarter, the Zacks Consensus Estimate for earnings has improved 1.2% to 87 cents per share over the past 30 days. However, it indicates a decline of 32.6% from the year-ago reported figure.

The consensus mark for revenues is pegged at $2.94 billion, implying a decline of 19.7% from the year-ago reported figure.

Let’s see how things have shaped up for this announcement.

TI’s compelling product line and manufacturing efficiencies, which include growing 300-millimeter Analog output, are likely to have helped this segment achieve growth during the quarter. However, weak performance of high-volume and power product lines may have affected its earnings.

Markedly, demand for the PCs and servers that power data centers is expected to have increased in the quarter to be reported as people are increasingly working from home due to the pandemic.

However, weak performance of processors and connected microcontrollers, along with reduced factory loadings might have affected its earnings in the to-be-reported quarter.

The Zacks Consensus Estimate for Embedded Processing revenues is currently pegged at $573 million, suggesting a decrease of 12.3% from the year-ago quarter.For the Analog segment, the Zacks Consensus Estimate for revenues is currently pegged at $2.13 billion, indicating a 13.5% year-over-year decrease.

Texas Instruments Incorporated Price and EPS Surprise

 

Texas Instruments Incorporated Price and EPS Surprise

Texas Instruments Incorporated price-eps-surprise | Texas Instruments Incorporated Quote

Overall Picture

TI has always been a well-executed company. Management has been focused on increasing its free cash flow per share and strengthening competitive advantages. However, increasing competition in the auto and industrial space, along with unfavorable currency impact might have hurt the company’s second-quarter performance.

Also, the coronavirus pandemic is likely to impact the upcoming results.

What Our Model Says

Our proven model predicts an earnings beat for Texas Instruments this time around.The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is the case here.

Currently, the company has a Zacks Rank #3 and an Earnings ESP of +6.19%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks to Consider

Here are a few other stocks that you may also want to consider, as our model shows that these too have the right combination of elements to post an earnings beat in the quarter to be reported.

NXP Semiconductors N.V. (NXPI - Free Report) has an Earnings ESP of +11.90% and holds a Zacks Rank of 2.

Netflix, Inc. (NFLX - Free Report) has an Earnings ESP of +2.27% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Expedia (EXPE - Free Report) has an Earnings ESP of +12.98% and a Zacks Rank #3.

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