Tags: Texas Instruments | earnings | TXN | sales

Texas Instruments First-Quarter Sales Outlook Tops Estimates

Monday, 26 Jan 2015 10:20 PM

Texas Instruments Inc. forecast first-quarter revenue that may exceed analysts’ estimates, as demand for chips used in cars and industrial equipment systems fueled a return to sales growth last year.

Net income will be 57 cents to 67 cents a share on sales of $3.07 billion to $3.33 billion, the maker of analog semiconductors said in a statement on Monday. That compares with analysts’ average estimates for profit of 62 cents on revenue of $3.19 billion.

Texas Instruments has customers in industries ranging from the military to health care for its thousands of different products, making its earnings an indicator of demand across the economy. Under Chief Executive Officer Rich Templeton, the company has exited the more volatile market for digital baseband chips in phones, reducing its dependence on any one end-market.

“They’re such a big machine, they have so many levers,” said Betsy Van Hees, an analyst at Wedbush Securities. She recommends buying the stock because the company is committed to using its cash on stock repurchases and dividends. “They’ve exited the sexy businesses. With sexy businesses comes volatility.”

The shares of Dallas-based Texas Instruments were little changed in extended trading. The stock had earlier fallen less than 1 percent to $55.05 at the close in New York.

Analog Focus

Texas Instruments plans to show investors that its focus on analog chips will fire up growth, which the company believes will exceed that of the semiconductor industry in general, Chief Financial Officer Kevin March said in an interview.

“The evidence says not only can we, but we have been for a number of years,” March said. “This was the last year where we have a drag on our growth rate.”

March said Texas Instruments’ analog and embedded processor business grew at 13 percent in 2014, while total sales increased 7 percent. The company’s revenue growth will slow to 4 percent in 2015, according to the average of analysts’ estimates compiled by Bloomberg.

Bill Kreher, an analyst at Edwards Jones & Co., said he still wants to see Texas Instruments outperform peers and steal market share.

“It’s difficult to beat the market when you resemble it,” said Kreher, who rates the stock a hold. “The company has historically had difficulty doing that.”

Texas Instruments is the biggest maker of analog chips, semiconductors that convert sound, touch and other inputs into electronic signals, which are found in everything from washing machines to space hardware.

Fourth-quarter net income was $825 million, or 76 cents a share, compared with $511 million, or 46 cents a share, a year earlier. Revenue was $3.27 billion, compared with $3.03 billion in the same period 12 months earlier. Analysts had estimated, on average, earnings of 69 cents a share on sales of $3.27 billion.

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Texas Instruments Inc. forecast first-quarter revenue that may exceed analysts' estimates, as demand for chips used in cars and industrial equipment systems fueled a return to sales growth last year.
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2015-20-26
Monday, 26 Jan 2015 10:20 PM
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