Texas Instruments (TXN) came out with quarterly earnings of $1.48 per share. This compares to earnings of $1.29 per share a year past. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of 68.18%. A quarter ago, it was expected that this chipmaker would post earnings of $1.01 per share when it really produced earnings of $1.24, delivering a surprise of 22.77%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Texas Instruments posted revenues of $3.24 billion for the quarter ended June 2020. This compares to year-ago revenues of $3.67 billion. the company has topped consensus revenue estimates three times over the last four quarters.
The sustainability of the stock’s immediate price movement based on the recently-released numbers and future earnings expectations can mostly depend on management’s statement on the earnings call.
Texas Instruments shares have added about 6.5% since the start of the year versus the S&P 500’s gain of 0.7%.
What’s Next for Texas Instruments?
While Texas Instruments has outperformed the market so far this year, the question that comes to investors’ minds is: what’s next for the stock?
There are no simple answers to this key question, however one reliable measure which will help investors address this is the company’s earnings outlook. Not only will this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed recently.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Texas Instruments was favorable. while the magnitude and direction of estimate revisions might change following the company’s just-released earnings report. So, the shares are expected to outperform the market in the near future.
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.91 on $2.97 billion in revenues for the coming quarter and $4.04 on $12.33 billion in revenues for the current fiscal year.
Investors should be aware of the fact that the outlook for the industry will have a material impact on the performance of the stock as well.