What to Expect From Texas Instruments Earnings

Texas Instruments Inc. (NASDAQ: TXN) is set to report its third-quarter financial results after the markets close on Wednesday. The consensus estimates from Thomson Reuters call for $0.68 in earnings per share (EPS) on $3.28 billion in revenue. The same period from the previous year had $0.76 in EPS on $3.50 billion.

This old-school chip tech company was the winner for the charging chipset solution that goes on the receive side of the new Galaxy GS6 phone, while another company won the transmit-side. The wireless charging solution is a good example of the company’s overall broad product portfolio.

The company generates up to 90% of its revenues from its analog and embedded processing businesses, which have well-diversified end-markets (autos, industrial, personal/consumer electronics), long product life cycles and limited capital intensity.

UBS is impressed with management’s commitment to returning 100% of its free cash flow to shareholders through dividends and share repurchases. Over the past five years, the company has increased its dividend at an annualized rate of 23% and has lowered the shares outstanding by nearly 40% since 2005. The UBS analysts expect dividends per share to grow 8% to 10% over the next few years.

A few analysts weighed in on Texas Instruments ahead of earnings:

• Deutsche Bank reiterated a Hold rating with a $48 price target.
• RBC Capital has an Outperform rating and lowered its price target to $58 from $60.
• Sterne Agee CRT initiated coverage with a Buy rating and a $60 price target.

So far in 2015, Texas Instruments has been flat year to date. However, over the past 52 weeks the stock is up 21%.

Shares of Texas instruments were trading around $53.00 Wednesday, with a consensus analyst price target of $54.17 and a 52-week trading range of $43.49 to $59.99.

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