Texas Instruments Soars on Strong Earnings and Guidance

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Texas Instruments Inc. (NASDAQ: TXN) released its third quarter financial results on Wednesday after the markets closed. The company reported $0.76 in earnings per share (EPS) on $3.43 billion in revenue compared to consensus estimates from Thomson Reuters that call for $0.68 in EPS on $3.28 billion in revenue. In the same period last year the company reported $0.76 in EPS on $3.50 billion in revenue.

For the fourth quarter, the company expects EPS in the range of $0.64 to $0.74 per on revenues of $3.07 billion to $3.33 billion. There are consensus estimates calling for $0.62 in EPS on $3.12 billion in revenue in the fourth quarter.

The company has returned $4.2 billion to shareholders in the past 12 months through stock repurchases and dividends. In September, it announced a quarterly dividend increase of 4 cents per share, a 12% increase. This marked 12 consecutive years of dividend increases. Texas Instruments also announced a $7.5 billion increase to its share buyback authorization.

Rich Templeton, TI’s Chairman, President and CEO, commented on earnings:

Our core businesses of Analog and Embedded Processing each grew year over year. Together, they comprised 85 percent of third-quarter revenue and have delivered nine consecutive quarters of year-over-year growth…

Our strategy to return to shareholders 100 percent of free cash flow plus proceeds from exercises of equity compensation minus net debt retirement reflects our confidence in the long-term sustainability of our business model.

On the balance sheet Texas Instruments reported $2.7 billion of cash and short-term investments at the end of the third quarter, 82% of which was owned by the company’s U.S. entities.

Shares of Texas Instruments closed Wednesday down 1% at $51.90, with a consensus analyst price target of $54.17 and a 52-week trading range of $43.49 to $59.99. Following the release of the earnings report shares were up 6.9% at $55.50 in the after-hours trading session.