What's in Store for Texas Instruments' (TXN) Q1 Earnings?

Texas Instruments TXN or TI is scheduled to report first-quarter 2020 results on Apr 21, after market close. In the last reported quarter, TI delivered a positive earnings surprise of 9.8%.

For the to-be-reported quarter, the Zacks Consensus Estimate for earnings has declined 1.9% to $1.01 per share over the past 30 days. This indicates a decline of 17.2% from the year-ago reported figure.

The consensus mark for revenues is pegged at $3.18 billion, implying a decline of 11.4% from the year-ago reported figure.

Let’s see how things have shaped up for this announcement.

Texas Instruments Incorporated Price and EPS Surprise

 

Texas Instruments Incorporated Price and EPS Surprise

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

Expectations From Analog

TI’s compelling product line and manufacturing efficiencies, which include growing 300-millimeter Analog output, are likely to have helped this segment achieve growth during the quarter. However, weak performance of high-volume and power product lines may have affected its earnings. Also, reduced factory loading might have affected the segment’s performance.

The Zacks Consensus Estimate for Analog segment revenues is currently pegged at $2.41 billion, indicating a 3.7% year-over-year decrease.

Expectations From Embedded Processing

Weak performance of processors and connected microcontrollers, along with reduced factory loadings might have affected its earnings in the to-be-reported quarter.

The Zacks Consensus Estimate for Embedded Processing revenues is currently pegged at $635 million, suggesting an increase of 0.3% from the year-ago quarter.

Overall Picture

TI has always been a well-executed company. Management remains focused on increasing its free cash flow per share and strengthening competitive advantages. However, increasing competition in the auto and industrial space, along with unfavorable currency impact might have hurt the company’s first-quarter performance.

Also, the coronavirus outbreak is likely to negatively impact the upcoming results.

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. But that’s not the case here.

Currently, the company has a Zacks Rank #3 and an Earnings ESP of -1.21%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few stocks that you may want to consider, as our model shows that these have the right combination of elements to post a positive earnings surprise in the quarter to be reported.

Synopsys, Inc. SNPS has an Earnings ESP of +2.69% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Wayfair Inc. W has an Earnings ESP of +2.62% and a Zacks Rank of 2.

PTC Inc. PTC has an Earnings ESP of +2.89% and a Zacks Rank of 3.

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