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Texas Instruments Meets on the Top Line, Misses Where it Counts

By Seth Jayson – Updated Apr 10, 2017 at 12:41PM

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Just the facts, Fool.

Texas Instruments (Nasdaq: TXN) reported earnings on July 22. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Texas Instruments met expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue shrank. Non-GAAP earnings per share dropped. GAAP earnings per share expanded significantly.

Margins expanded across the board.

Revenue details
Texas Instruments reported revenue of $3.05 billion. The 36 analysts polled by S&P Capital IQ predicted a top line of $3.06 billion on the same basis. GAAP reported sales were 8.6% lower than the prior-year quarter's $3.34 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.42. The 32 earnings estimates compiled by S&P Capital IQ averaged $0.44 per share. Non-GAAP EPS of $0.42 for Q2 were 4.5% lower than the prior-year quarter's $0.44 per share. GAAP EPS of $0.58 for Q2 were 53% higher than the prior-year quarter's $0.38 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 51.5%, 200 basis points better than the prior-year quarter. Operating margin was 23.3%, 190 basis points better than the prior-year quarter. Net margin was 21.7%, 830 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $3.21 billion. On the bottom line, the average EPS estimate is $0.56.

Next year's average estimate for revenue is $12.22 billion. The average EPS estimate is $1.85.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,535 members out of 1,663 rating the stock outperform, and 128 members rating it underperform. Among 391 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 375 give Texas Instruments a green thumbs-up, and 16 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Texas Instruments is hold, with an average price target of $35.43.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Texas Instruments Incorporated Stock Quote
Texas Instruments Incorporated
$154.78 (-2.32%) $-3.67

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