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Why Is Texas Instruments (TXN) Up 5.7% Since Last Earnings Report?
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It has been about a month since the last earnings report for Texas Instruments (TXN - Free Report) . Shares have added about 5.7% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Texas Instruments due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Texas Instruments Incorporated before we dive into how investors and analysts have reacted as of late.
Texas Instruments reported first-quarter 2026 earnings of $1.68 per share, which increased 31.3% year over year. The bottom line beat the Zacks Consensus Estimate by 22.6%.
TXN’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, while missing once, with an average surprise of 6.9%.
TXN posted revenues of $4.83 billion, which rose 18.6% from the year-ago quarter. The top line surpassed the consensus mark by 6.8%, driven by strength in industrial and data center demand.
TXN’s Segment Mix Highlights Broad-Based Growth
Texas Instruments’ first-quarter results reflected strength across its two core operating segments.
Analog revenues came in at $3.92 billion (81.3% of total revenues), which grew 22% from the year-ago quarter, underscoring improving demand conditions across key end markets. The figure came above our model estimate of $3.57 billion.
Embedded Processing revenues totaled $723 million (15% of total revenues), reflecting 12% year-over-year growth. The figure surpassed our model estimate of $682.9 million.
The Other segment generated $178 million of revenues (3.7% of total revenues), which declined 16% from the prior-year period. The figure missed our model estimate of $278.6 million.
Texas Instruments Expands Operating Leverage
Texas Instruments’ gross profit increased 21% year over year to $2.80 billion. Gross margin of 58% expanded 120 basis points (bps) year over year. Selling, general and administrative (SG&A) expenses decreased 1.7% year over year to $464 million. As a percentage of revenues, SG&A expenses contracted 200 bps year over year to 9.6%.
Research and development expenses declined 1.4% year over year to $510 million. As a percentage of revenues, it decreased 160 bps year over year to 10.6%.
Operating profit rose 36.6% year over year to $1.81 billion. The operating margin was 37.5%, which expanded 490 bps from the prior-year quarter’s number.
TXN Cash Generation Supports Shareholder Return
As of March 31, 2026, the cash and short-term investment balance was $5.1 billion, up from $4.88 billion as of Dec. 31, 2025.
At the end of the reported quarter, TXN’s long-term debt was $12.9 billion, down from $13.55 billion in the previous quarter.
Texas Instruments generated an operating cash flow of approximately $1.52 billion in the first quarter. During the first quarter, it repurchased stocks worth $158 million and paid $1.29 billion in dividends.
Texas Instruments Initiates Guidance for Q2 2026
Management’s outlook calls for second-quarter 2026 revenues in the range of $5.00-$5.40 billion. The company expects earnings per share between $1.77 and $2.05.
The company expects an effective tax rate of about 13% in the second quarter.
On the second-quarter earnings call, management pointed to continued acceleration in industrial and data center, noting industrial growth of more than 30% year over year and data center growth of about 90%. The company also highlighted its agreement to acquire Silicon Labs, a deal it expects to close in the first half of 2027, subject to approvals.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 23.34% due to these changes.
VGM Scores
Currently, Texas Instruments has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock has a grade of F on the value side, putting it in the lowest quintile for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Texas Instruments has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Why Is Texas Instruments (TXN) Up 5.7% Since Last Earnings Report?
It has been about a month since the last earnings report for Texas Instruments (TXN - Free Report) . Shares have added about 5.7% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Texas Instruments due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Texas Instruments Incorporated before we dive into how investors and analysts have reacted as of late.
Texas Instruments Q1 Earnings Beat Estimates, Revenues Rise Y/Y
Texas Instruments reported first-quarter 2026 earnings of $1.68 per share, which increased 31.3% year over year. The bottom line beat the Zacks Consensus Estimate by 22.6%.
TXN’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, while missing once, with an average surprise of 6.9%.
TXN posted revenues of $4.83 billion, which rose 18.6% from the year-ago quarter. The top line surpassed the consensus mark by 6.8%, driven by strength in industrial and data center demand.
TXN’s Segment Mix Highlights Broad-Based Growth
Texas Instruments’ first-quarter results reflected strength across its two core operating segments.
Analog revenues came in at $3.92 billion (81.3% of total revenues), which grew 22% from the year-ago quarter, underscoring improving demand conditions across key end markets. The figure came above our model estimate of $3.57 billion.
Embedded Processing revenues totaled $723 million (15% of total revenues), reflecting 12% year-over-year growth. The figure surpassed our model estimate of $682.9 million.
The Other segment generated $178 million of revenues (3.7% of total revenues), which declined 16% from the prior-year period. The figure missed our model estimate of $278.6 million.
Texas Instruments Expands Operating Leverage
Texas Instruments’ gross profit increased 21% year over year to $2.80 billion. Gross margin of 58% expanded 120 basis points (bps) year over year.
Selling, general and administrative (SG&A) expenses decreased 1.7% year over year to $464 million. As a percentage of revenues, SG&A expenses contracted 200 bps year over year to 9.6%.
Research and development expenses declined 1.4% year over year to $510 million. As a percentage of revenues, it decreased 160 bps year over year to 10.6%.
Operating profit rose 36.6% year over year to $1.81 billion. The operating margin was 37.5%, which expanded 490 bps from the prior-year quarter’s number.
TXN Cash Generation Supports Shareholder Return
As of March 31, 2026, the cash and short-term investment balance was $5.1 billion, up from $4.88 billion as of Dec. 31, 2025.
At the end of the reported quarter, TXN’s long-term debt was $12.9 billion, down from $13.55 billion in the previous quarter.
Texas Instruments generated an operating cash flow of approximately $1.52 billion in the first quarter. During the first quarter, it repurchased stocks worth $158 million and paid $1.29 billion in dividends.
Texas Instruments Initiates Guidance for Q2 2026
Management’s outlook calls for second-quarter 2026 revenues in the range of $5.00-$5.40 billion. The company expects earnings per share between $1.77 and $2.05.
The company expects an effective tax rate of about 13% in the second quarter.
On the second-quarter earnings call, management pointed to continued acceleration in industrial and data center, noting industrial growth of more than 30% year over year and data center growth of about 90%. The company also highlighted its agreement to acquire Silicon Labs, a deal it expects to close in the first half of 2027, subject to approvals.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 23.34% due to these changes.
VGM Scores
Currently, Texas Instruments has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock has a grade of F on the value side, putting it in the lowest quintile for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Texas Instruments has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.