Texas Instruments Stock Rises on Q1 Earnings and Revenue Beat

Texas Instruments TXN reported better-than-expected results for first-quarter 2025. The results revealed an increase in both revenues and net income on a year-over-year basis. TXN also surpassed the Zacks Consensus Estimate as well as management’s guidance.Texas Instruments’ first-quarter 2025 earnings per share of $1.28 surpassed the Zacks Consensus Estimate by 20.8% and came ahead of management’s guidance of 94 cents to $1.16. The quarterly earnings also increased 6.7% year over year.TXN’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 9%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)Texas Instruments reported revenues of $4.07 billion, which beat the Zacks Consensus Estimate by 4.1%. The figure surpassed management’s guidance of $3.74-$4.06 billion. The top line rose 11.1% year over year.The better-than-expected results pushed TXN stock upward by 3.5% in the pre-market hours of Thursday’s trading session. TXN shares have lost 13% in the past month due to widespread sell-off in tech stocks, triggered by fears of rising trade tensions and slowing economic growth.Texas Instruments Incorporated Price, Consensus and EPS Surprise Texas Instruments Incorporated price-consensus-eps-surprise-chart | Texas Instruments Incorporated QuoteTexas Instruments’ Q1 Top-Line DetailsTexas Instruments’ revenues were primarily propelled by the strength in its industrial and automotive markets, which together accounted for a significant 70% of first-quarter revenues.Segment-wise, Texas Instruments operates under three business divisions: Analog, Embedded Processing and Other.Analog: Revenues of $3.21 billion were generated from the segment (78.9% of total revenues), up 13% from the year-ago quarter’s level. The figure came above the Zacks Consensus Estimate of $3.04 billion.Embedded Processing: Revenues amounted to $647 million (15.9% of total revenues), down 0.8% year over year. The figure missed the Zacks Consensus Estimate of $655.3 million.Other: Revenues totaled $212 million (5.2% of total revenues), up 23% from the prior-year quarter’s level. The figure surpassed the consensus mark of $205.5 million.Texas Instruments’ Operating DetailsTexas Instruments’ gross profit declined 4.8% year over year to $2.31 billion. Gross margin of 56.8% contracted 40 basis points (bps) from the year-ago quarter’s 57.2%.Selling, general and administrative (SG&A) expenses grew 3.7% year over year to $472 million. As a percentage of revenues, SG&A expenses contracted 80 bps year over year to 11.6%.Research and development (R&D) expenses grew 8.2% to $517 million. As a percentage of revenues, it decreased 40 basis points to 12.7%.Operating profit rose 3% year over year to $1.32 billion. The operating margin was 32.5%, which contracted 260 bps from the prior-year quarter’s number.TXN’s Balance Sheet & Cash FlowAs of March 31, 2025, the cash and short-term investment balance was $5 billion, down from $7.6 billion as of Dec. 31, 2024.At the end of the reported quarter, TXN’s long-term debt of $12.85 billion remained almost the same compared to the previous quarter.Texas Instruments generated an operating cash flow of approximately $849 million in the first quarter.During the first quarter, it repurchased stocks worth $653 million and paid $1.24 billion in dividends.TXN Initiates Guidance for Q2 2025For the second quarter of 2025, TXN expects revenues between $4.17 billion to $4.53 billion. The Zacks Consensus Estimate for second-quarter 2025 revenues is currently pegged at $4.13 billion, indicating an increase of 8% from the year-ago quarter.The company expects earnings per share between $1.21 and $1.47. The consensus mark for the same is pegged at $1.23 per share, indicating a rise of 0.8% from the year-ago quarter.The company expects the effective tax rate to be approximately 12%.Zacks Rank and Stocks to ConsiderCurrently, TXN carries a Zacks Rank #3 (Hold).ACM Research ACMR, Super Micro Computer SMCI and ACI Worldwide ACIW are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. ACIW, SMCI and ACMR sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.ACMR shares have lost 29.9% for the past year. The Zacks Consensus Estimate for ACMR’s full-year 2025 earnings is pegged at $2.15 per share, up by 35 cents over the past 60 days, suggesting a decline of 4.8% from the year-ago quarter’s reported figure.SMCI shares have plunged 56.4% in the past year. The Zacks Consensus Estimate for SMCI’s full-year fiscal 2025 earnings has been revised downward to $2.52 in the past seven days, suggesting year-over-year growth of 14%.ACIW shares have gained 55% over the past year. The Zacks Consensus Estimate for ACIW’s full-year 2025 earnings is pegged at $2.80 per share, up by 7 cents over the past 30 days, implying a rise of 6% from the year-ago quarter’s levels.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Texas Instruments Incorporated (TXN): Free Stock Analysis Report ACM Research, Inc. (ACMR): Free Stock Analysis Report Super Micro Computer, Inc. (SMCI): Free Stock Analysis Report ACI Worldwide, Inc. (ACIW): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks