Texas Instruments ($ TXN) is the first major US chip maker to publish quarterly results. The company mainly produces for the industrial and automotive sectors. The company also supplies chips for everyday devices such as televisions and washing machines, but also to control medical devices. In addition, Texas Instruments manufactures digital signal processors required for processing audio and video signals. The company has indicated a revival in demand in the automotive sector, and a positive outlook for the fourth quarter is forecast.
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It opened the books for the last quarter of the year at today’s quarterly financial conference. The period previously ended on September 30, 2020. Analysts expect earnings per share on an average profit of $1.27. A year earlier that was $1.49 per share. The same analysts expect an average discount of 8.87% in sales, compared to sales of $3.77 billion in the same quarter in 2019. An average sales of $3.44 billion is expected for the past quarter.
For the fiscal year, average earnings per share are expected to be $5.17 against $5.24 in the same period in 2019. Analysts estimate revenue to average $13.35 billion against $14.38 billion a year earlier.
Texas Instruments announced sales of $3.41 to $3.69 billion after the US stock market closed. The forecast for this period was only $3.35 billion, surpassing the tech firm’s expected revenue. Thanks to strong demand from the automotive industry and increasing demand from consumer electronics manufacturers, sales in the third quarter increased 18% (to $3.82 billion) from the previous quarter. Compared to the third quarter of 2019, sales have increased by 1%.
Earnings per share of $1.20 to $1.40 are expected in the fourth quarter, after $1.45 in the past quarter. Again, a lower value of $1.20 was expected. The investors seem very satisfied with this. The Texas Instruments stock price rose 1.34% to $152.85 during out-of-hours trading on the Nasdaq.
Additional data is a gross margin of 64.3% versus a consensus of 64.6% and an operating margin of 42.2% versus a consensus of 40%.
Texas Instruments currently has more than 100,000 customers, ranging from consumer electronics makers to aerospace hardware. That wide reach makes its earnings and forecasts a measure of demand across the economy.
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