Texas Instruments Beats on EPS but GAAP Results Lag

Texas Instruments (Nasdaq: TXN) reported earnings on July 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Texas Instruments met expectations on revenue and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue contracted and GAAP earnings per share shrank significantly.

Margins dropped across the board.

Revenue details
Texas Instruments reported revenue of $3.34 billion. The 37 analysts polled by S&P Capital IQ expected a top line of $3.34 billion on the same basis. GAAP reported sales were 3.6% lower than the prior-year quarter's $3.46 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.47. The 33 earnings estimates compiled by S&P Capital IQ anticipated $0.40 per share. GAAP EPS of $0.38 for Q2 were 32% lower than the prior-year quarter's $0.56 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 49.5%, 120 basis points worse than the prior-year quarter. Operating margin was 21.4%, 510 basis points worse than the prior-year quarter. Net margin was 13.4%, 600 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $3.38 billion. On the bottom line, the average EPS estimate is $0.46.

Next year's average estimate for revenue is $13.18 billion. The average EPS estimate is $1.65.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,541 members out of 1,661 rating the stock outperform, and 120 members rating it underperform. Among 351 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 327 give Texas Instruments a green thumbs-up, and 24 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Texas Instruments is outperform, with an average price target of $34.37.

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