Earnings Preview : Texas Instruments Inc. (NYSE: TXN) Third Quarter 2010
Monday, October 11, 2021 9:12 AM

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Texas Instruments Inc. (NYSE: TXN), the world's second largest maker of mobile phone chips, is scheduled to release third quarter financial results after the closing bell on Monday, October 18, 2010. Analysts, on average, expect the company to report earnings of 69 cents per share on revenue of $3.69 billion. In the year-ago quarter, the company reported earnings of 42 cents per share on revenue of $2.88 billion.

Texas Instruments Incorporated engages in the design and sale of semiconductors to electronics designers and manufacturers worldwide. The company operates in four segments: Analog, Embedded Processing, Wireless and Other. The company has successfully realigned its business to reduce focus on the commoditized, low-margin market for wireless chips. Texas Instruments expects Analog and Embedded Processing to be its primary growth engines in the years ahead.

In the preceding second quarter, the Dallas, Texas-based company's net income was $769 million, or 62 cents a share, compared to $260 million, or 20 cents a share, in the prior-year quarter. Revenue surged to $3.5 billion from $2.46 billion. Analysts, on average, expected the company to report earnings of 62 cents per share on revenue of $3.52 billion. Gross profit improved to 54.2% from 45.7% in the comparable quarter last year. 

Early in September, the chipmaker narrowed its its sales and earnings outlook for the third quarter. The company now expects earnings of 66 cents and 72 cents a share, compared with the prior range of 64 cents to 74 cents a share. The Dallas, Texas-based company now expects third-quarter revenue between $3.62 billion and $3.78 billion, compared to its prior estimate between $3.55 billion and $3.85 billion.

Recently, Texas Instruments said that its Board of Directors authorized the company to repurchase an additional $7.5 billion of its common stock. This is in addition to the $1.3 billion in repurchase authorizations remaining at the end of June 2010. Additionally, the company said that it plans to raise its quarterly cash dividend by $0.01 per common share. TI's new quarterly dividend will be $0.13 per share of common stock, resulting in annual dividend payments of $0.52 per common share.

According to  Semiconductor Industry Association, worldwide semiconductor sales reached grew 37 percent year-over-year in July, to $25.2 billion, thanks in part to a surge in demand for mobile phones and computers,. Sales were up about 1 percent from June's $24.9 billion,. The industry group expects sales of microchips to rise 28 percent to $290.5 billion this year.

Among other developments, the company agreed to sell its cable modem product line to Intel Corp. (NASDAQ: INTC) for an undisclosed sum.

In terms of stock performance, shares of the company have gained more than 4% since the beginning of the year.

Disclosure: Author doesn't own any of the stocks discussed here.



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