Texas Instruments tops earnings and revenue estimates in the first quarter

Texas Instruments Inc. (NASDAQ: TXN) climbed 3% in after-hours trading on Tuesday as the chipmaker posted stronger than expected financial results for the first quarter. The company also gave Q2 guidance that came in the range of consensus forecasts. In the regular session, Texas Instruments had declined roughly 4.2%.

The company’s net income in the first quarter was recorded at £950 million that translates to £1.0 per share as compared to a higher £990 million (£1.02 per share) that was reported in the same quarter last year.

Texas Instruments Posts A 7% Decline In Revenue

According to Texas Instruments, its original guidance for earnings didn’t account for an 8-pence-a-share benefit. As per the financial report on Tuesday, the company’s revenue came at £2.69 billion in the recent quarter that was 7% lower than the year-ago figure of £2.90 billion.

According to FactSet, experts had forecast Texas Instruments to print £2.57 billion in revenue in the first quarter. Their estimate for earnings per share was capped at 82 pence per share.

CEO Rich Templeton of Texas Instruments commented on the earnings report on Tuesday and stated:

“With a COVID-19 recession likely upon us, and with reduced visibility of customer demand, we are using the 2008 financial crisis to model our second-quarter outlook.”

The company now expects to make 52 pence per share to 84 pence per share of earnings in the second quarter. On the revenue front, Texas Instruments’ anticipates £2.11 billion to £2.58 billion in Q2. Analysts, on the other hand, forecast the company to generate £2.58 billion in revenue in the second quarter and make 83 pence of earnings per share.

Texas Instruments Kicked Off Earnings Season For U.S Chipmakers

In the league of prominent U.S chipmakers, Texas Instruments is the 1^st to report earnings after the government imposed strict social distancing measures to minimize the fast transmission of Coronavirus. The company manufactures semiconductors that are broadly used in equipment from satellites down to dishwashers. Its financial performance, therefore, is a fine indicator of demand in various industries across the country.

At £89 per share, Texas Instruments is currently around 30% down year to date in the stock market. The stock has recovered roughly 15% in the past four weeks. In 2019, it had recorded an annual gain of a little under 40%.

At the time of writing, Texas Instruments is valued at £80.65 billion and has a price to earnings ratio of 20.40.