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Texas Instruments (TXN) Scales 52-Week High on Strong Q1
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Shares of Texas Instruments or TI (TXN - Free Report) hit a new 52-week high of $61.08 on May 27, eventually closing at $61.02. The company returned 9.1% in the past one-year period and has added approximately 11.3% year to date. Average volume of shares traded over the last three months was roughly 4,663K.
What is Driving Texas Instruments?
Texas Instruments is one of the largest suppliers of analog integrated circuits. The company’s compelling product line, increasing share in the automotive market, differentiation in its business and lower-cost 300mm capacity should in combination drive TI.
The price appreciation can be attributed to TI’s strong fundamentals and better-than-expected first-quarter 2016 results reported on Apr 27. In response to strong earnings, the stock has gained 2.0%.
In the first quarter, TI reported earnings of 65 cents per share, surpassing the Zacks Consensus Estimate by 3 cents. Revenues of $3.01 billion were within the guided range of $3.07 billion and $3.33 billion and above the Zacks Consensus Estimate by 0.9%. The automotive market was again strong last quarter (particularly infotainment, hybrid electric vehicle and powertrain systems) with the improvement in industrial being broad-based.
Also, margins expanded and should continue to expand because of the secular strength in the automotive and industrial markets, a stronger mix of analog and embedded processing products, benefits of restructuring actions and more 300mm capacity coming online.
Moreover, the company provided a solid guidance for the upcoming quarter. Revenues are expected in the range of $3.07 billion and $3.33 billion (up 6.4% sequentially at the mid-point), The Zacks Consensus Estimate of $3.17 billion falls within the guided range. Earnings per share for the quarter are expected at 67 cents to 77 cents, while the Zacks Consensus Estimate is pegged at 72 cents.
The improved guidance reflects recovering auto and industrial markets, which are helping the company. Also, channel inventories remained very low in the quarter, meaning that demand is likely to remain strong.
Also, TI has an impressive record of returning cash to shareholders through share buybacks and regular dividends payouts. In the first quarter, the company spent $630 million on share repurchases and $383 million on cash dividends.
Additionally, TI delivered an average positive earnings surprise of nearly 5.29% in the trailing four quarters. The Zacks Rank #3 (Hold) company’s solid market position in the analog market, solid execution, continued innovation and strong long-term growth potential position it well.
Stocks to Consider
Some well-placed stocks in the technology space are CommVault Systems, Inc. (CVLT - Free Report) and DST Systems Inc. sporting a Zacks Rank #1 (Strong Buy), and Manhattan Associates, Inc. (MANH - Free Report) carrying a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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Texas Instruments (TXN) Scales 52-Week High on Strong Q1
Shares of Texas Instruments or TI (TXN - Free Report) hit a new 52-week high of $61.08 on May 27, eventually closing at $61.02. The company returned 9.1% in the past one-year period and has added approximately 11.3% year to date. Average volume of shares traded over the last three months was roughly 4,663K.
What is Driving Texas Instruments?
Texas Instruments is one of the largest suppliers of analog integrated circuits. The company’s compelling product line, increasing share in the automotive market, differentiation in its business and lower-cost 300mm capacity should in combination drive TI.
The price appreciation can be attributed to TI’s strong fundamentals and better-than-expected first-quarter 2016 results reported on Apr 27. In response to strong earnings, the stock has gained 2.0%.
In the first quarter, TI reported earnings of 65 cents per share, surpassing the Zacks Consensus Estimate by 3 cents. Revenues of $3.01 billion were within the guided range of $3.07 billion and $3.33 billion and above the Zacks Consensus Estimate by 0.9%. The automotive market was again strong last quarter (particularly infotainment, hybrid electric vehicle and powertrain systems) with the improvement in industrial being broad-based.
Also, margins expanded and should continue to expand because of the secular strength in the automotive and industrial markets, a stronger mix of analog and embedded processing products, benefits of restructuring actions and more 300mm capacity coming online.
Moreover, the company provided a solid guidance for the upcoming quarter. Revenues are expected in the range of $3.07 billion and $3.33 billion (up 6.4% sequentially at the mid-point), The Zacks Consensus Estimate of $3.17 billion falls within the guided range. Earnings per share for the quarter are expected at 67 cents to 77 cents, while the Zacks Consensus Estimate is pegged at 72 cents.
The improved guidance reflects recovering auto and industrial markets, which are helping the company. Also, channel inventories remained very low in the quarter, meaning that demand is likely to remain strong.
Also, TI has an impressive record of returning cash to shareholders through share buybacks and regular dividends payouts. In the first quarter, the company spent $630 million on share repurchases and $383 million on cash dividends.
Additionally, TI delivered an average positive earnings surprise of nearly 5.29% in the trailing four quarters. The Zacks Rank #3 (Hold) company’s solid market position in the analog market, solid execution, continued innovation and strong long-term growth potential position it well.
Stocks to Consider
Some well-placed stocks in the technology space are CommVault Systems, Inc. (CVLT - Free Report) and DST Systems Inc. sporting a Zacks Rank #1 (Strong Buy), and Manhattan Associates, Inc. (MANH - Free Report) carrying a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>