What's in the Cards for Texas Instruments (TXN) in Q3 Earnings?

Zacks Equity Research
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Texas Instruments Incorporated TXN is scheduled to report its third-quarter 2023 results on Oct 24.

For third-quarter 2023, the company expects revenues between $4.36 billion and $4.74 billion. The Zacks Consensus Estimate is pegged at $4.57 billion, suggesting a decline of 12.9% from the year-ago quarter’s reported figure.

Management expects earnings of $1.68-$1.92 per share for the quarter under review. The consensus mark is pegged at $1.81 per share, indicating a fall of 26.1% from the prior-year quarter’s reported figure. The estimate has moved downward by 0.5% over the past 30 days.

TXN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, delivering an earnings surprise of 5.85%, on average.

Texas Instruments Incorporated Price and EPS Surprise

Texas Instruments Incorporated Price and EPS Surprise
Texas Instruments Incorporated Price and EPS Surprise

Texas Instruments Incorporated price-eps-surprise | Texas Instruments Incorporated Quote

Factors to Consider

Texas Instruments’ third-quarter performance is likely to have benefited from its broad product portfolio and expanding manufacturing capabilities.

Moreover, the company’s competitive advantages in manufacturing and technology are expected to have been positives.

Further, strong momentum in the automotive market is expected to benefit the to-be-reported quarter's performance.

Texas Instruments’ Embedded Processing business, owing to the refocusing of the MCU businesses, is expected to have positively impacted the upcoming quarterly results.

The Zacks Consensus Estimate for third-quarter 2023 Embedded Processing segment’s revenues is pegged at $887 million, implying year-over-year growth of 8%.

However, widespread weakness in communications equipment and enterprise systems is likely to have been a major headwind.

The imposition of new export regulations is expected to reflect negatively in the upcoming quarterly results.

Further, weakening demand environment, primarily due to inventory reductions by customers, is expected to have impacted the performance of the Analog segment during the quarter to be reported.

The consensus estimate for third-quarter 2023 Analog revenues is pegged at $3.3 billion, implying a decline of 17.3% from the year-ago reported figure.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Texas Instruments this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as elaborated below.

Texas Instruments currently has an Earnings ESP of -0.59% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering from the same space, as our model shows that these have the right combination of elements to beat on earnings in the soon-to-be-reported quarterly results.

GoDaddy GDDY has an Earnings ESP of +14.09% and a Zacks Rank #1 at present. You can see the complete list of today's Zacks #1 Rank stocks here.

GoDaddy is scheduled to release third-quarter 2023 results on Nov 2. The Zacks Consensus Estimate for GDDY’s earnings is pegged at 71 cents per share, suggesting growth of 12.7% from the prior-year period’s reported figure.

Alphabet GOOGL has an Earnings ESP of +0.89% and a Zacks Rank #3 at present

Alphabet is set to report third-quarter 2023 results on Oct 24. The Zacks Consensus Estimate for GOOGL’s earnings is pegged at $1.45 per share, implying growth of 36.8% from the prior-year quarter’s reported figure

Carrier Global CARR has an Earnings ESP of +4.16% and a Zacks Rank #3 at present.

Carrier is set to report third-quarter 2023 results on Oct 26. The Zacks Consensus Estimate for CARR’s earnings is pegged at 78 cents per share, suggesting growth of 11.4% from the prior-year period’s reported figure.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Texas Instruments Incorporated (TXN) : Free Stock Analysis Report

Alphabet Inc. (GOOGL) : Free Stock Analysis Report

GoDaddy Inc. (GDDY) : Free Stock Analysis Report

Carrier Global Corporation (CARR) : Free Stock Analysis Report

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