We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Texas Instruments (TXN) Q2 Earnings: What's in Store?
Read MoreHide Full Article
Texas Instruments Inc. (TXN - Free Report) is set to report second-quarter 2016 results on Jul 25. Last quarter, the company posted a 4.84% positive earnings surprise.
Let’s see how things are shaping up for this announcement.
Texas Instruments or TI reported mixed first quarter results with earnings beating the Zacks Consensus Estimate but revenues missing the same. Though the communications, personal electronics and other markets were weak, the recovering auto and industrial markets helped the company to deliver good results.
Texas Instruments continues to prudently invest its R&D dollars in several high-margin, high-growth areas of the analog and embedded processing markets. This is gradually increasing its exposure to the industrial and automotive markets as well as dollar content at customers, while reducing its exposure to the volatile consumer/computing markets.
The company along with chipmaker Intel remains one of the few semiconductor companies that depend on internal capacity for manufacturing the bulk of its devices. However, since it has the policy of building out capacity ahead of demand, it can make opportunistic purchases. As a result, the company has been able to contain capex at up to 4% of sales even while expanding.
TI provided strong revenue guidance for the second quarter. The company expects revenues between $3.07 billion and $3.33 billion (up 5.9% sequentially at the mid-point). The outlook includes acquisition charges of $80 million per quarter continuing till the third quarter of 2019, which will then decline to $50 million per quarter for the next two years. The annual effective tax rate and the rate to be applied for the second quarter will be around 30%.
This revenue guidance reflects lackluster demand for personal electronics, particularly PCs, and communications equipment.
Earnings per share in the quarter are expected to be in a range of 67 cents to 77 cents.
Earnings Whispers
Our proven model does not conclusively show that Texas Instruments is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 72 cents. Therefore, its Earnings ESP is 0.00%.
Zacks Rank: Texas Instruments has a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
You may consider the following stocks, with a positive Earnings ESP and a favorable Zacks Rank:
Open Text Corp. (OTEX - Free Report) with an Earnings ESP of +1.10% and Zacks Rank #1.
Silicon Motion Technology Corp. (SIMO - Free Report) with an Earnings ESP of +15.15% and Zacks Rank #1.
Black Knight Financial Services, Inc. , with an Earnings ESP of +3.45% and a Zacks Rank #2.
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 >>
See More Zacks Research for These Tickers
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Texas Instruments (TXN) Q2 Earnings: What's in Store?
Texas Instruments Inc. (TXN - Free Report) is set to report second-quarter 2016 results on Jul 25. Last quarter, the company posted a 4.84% positive earnings surprise.
Let’s see how things are shaping up for this announcement.
TEXAS INSTRS Price and EPS Surprise
TEXAS INSTRS Price and EPS Surprise | TEXAS INSTRS Quote
Factors at Play
Texas Instruments or TI reported mixed first quarter results with earnings beating the Zacks Consensus Estimate but revenues missing the same. Though the communications, personal electronics and other markets were weak, the recovering auto and industrial markets helped the company to deliver good results.
Texas Instruments continues to prudently invest its R&D dollars in several high-margin, high-growth areas of the analog and embedded processing markets. This is gradually increasing its exposure to the industrial and automotive markets as well as dollar content at customers, while reducing its exposure to the volatile consumer/computing markets.
The company along with chipmaker Intel remains one of the few semiconductor companies that depend on internal capacity for manufacturing the bulk of its devices. However, since it has the policy of building out capacity ahead of demand, it can make opportunistic purchases. As a result, the company has been able to contain capex at up to 4% of sales even while expanding.
TI provided strong revenue guidance for the second quarter. The company expects revenues between $3.07 billion and $3.33 billion (up 5.9% sequentially at the mid-point). The outlook includes acquisition charges of $80 million per quarter continuing till the third quarter of 2019, which will then decline to $50 million per quarter for the next two years. The annual effective tax rate and the rate to be applied for the second quarter will be around 30%.
This revenue guidance reflects lackluster demand for personal electronics, particularly PCs, and communications equipment.
Earnings per share in the quarter are expected to be in a range of 67 cents to 77 cents.
Earnings Whispers
Our proven model does not conclusively show that Texas Instruments is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 72 cents. Therefore, its Earnings ESP is 0.00%.
Zacks Rank: Texas Instruments has a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
You may consider the following stocks, with a positive Earnings ESP and a favorable Zacks Rank:
Open Text Corp. (OTEX - Free Report) with an Earnings ESP of +1.10% and Zacks Rank #1.
Silicon Motion Technology Corp. (SIMO - Free Report) with an Earnings ESP of +15.15% and Zacks Rank #1.
Black Knight Financial Services, Inc. , with an Earnings ESP of +3.45% and a Zacks Rank #2.
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 >>