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What's in the Offing for Texas Instruments (TXN) in Q4 Earnings?

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Texas Instruments Incorporated (TXN - Free Report) is scheduled to report fourth-quarter 2023 results on Jan 23.

For fourth-quarter 2023, Texas Instruments expects revenues between $3.93 billion and $4.27 billion. The Zacks Consensus Estimate for revenues is pegged at $4.11 billion, indicating a decline of 11.9% from the year-ago quarter’s reported figure.

Management expects earnings in the range of $1.35-$1.57 per share for the quarter under review. The consensus mark for earnings is pegged at $1.46 per share, indicating a decline of 31.5% from the prior-year quarter’s reported figure. The estimate has remained unchanged over the past 30 days.

TXN’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same on one occasion, delivering an average surprise of 4.9%.

Factors to Consider

Texas Instruments’ product portfolio strength and expanding manufacturing capabilities are expected to get reflected in its upcoming quarterly results.

The company’s strong investments in growth avenues and competitive advantages are expected to have been the positives.

Texas Instruments’ continuous returns to shareholders are anticipated to have acted as tailwinds. Its deepening focus on accelerating free cash flow generation is likely to have been another positive. The impacts of all these factors are expected to be reflected in the company’s fourth-quarter results.

However, widespread weakness in the industrial and communication equipment markets might have been a major headwind.

A weakening demand environment, primarily due to inventory reductions by customers, is expected to have impacted the performance of both Analog and Embedded Processing segments during the quarter to be reported.

The Zacks Consensus Estimate for Analog revenues is pegged at $3.05 billion, implying a decline of 14.3% from the year-ago reported figure.

The consensus mark for Embedded Processing revenues is pinned at $826 million, indicating a decline of 1.3% from the prior-year quarter.

Macroeconomic uncertainties, geopolitical tensions and rising inflation are expected to have weighed on TXN in the quarter under review.

What Our Model Says

Our proven model does not conclusively predict 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 not the case here, as elaborated below.

Texas Instruments currently has a Zacks Rank #4 (Sell) and an Earnings ESP of +0.12%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering from the same space, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

Apple (AAPL - Free Report) has an Earnings ESP of +2.13% and sports a Zacks Rank #2 at present. You can see the complete list of today's Zacks #1 Rank stocks here.  

Apple is scheduled to release first-quarter fiscal 2024 results on Feb 1. The Zacks Consensus Estimate for AAPL’s earnings is pegged at $2.08 per share, indicating a rise of 10.6% from the prior-year quarter's level.

Alphabet (GOOGL - Free Report) has an Earnings ESP of +8.17% and a Zacks Rank #3 at present.

Alphabet is scheduled to release fourth-quarter 2023 results on Jan 30. The Zacks Consensus Estimate for GOOGL’s earnings is pinned at $1.62 per share, indicating growth of 54.3% from the year-ago quarter's level.

ASML Holding (ASML - Free Report) has an Earnings ESP of +3.32% and a Zacks Rank #2 at present.

ASML Holding is set to report fourth-quarter 2023 results on Jan 24. The Zacks Consensus Estimate for ASML’s earnings is pegged at $5.12 per share, indicating growth of 8.9% from the prior-year period’s reported figure.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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