Understanding Texas Instruments (TXN) Reliance on International Revenue

Have you assessed how the international operations of Texas Instruments (TXN) performed in the quarter ended September 2024? For this chipmaker, possessing an expansive global footprint, parsing the trends of international revenues could be critical to gauge its financial resilience and growth prospects.The global economy today is deeply interlinked, making a company's engagement with international markets a critical factor in determining its financial success and growth path. It has become essential for investors to comprehend how much a company relies on these foreign markets, as this understanding reveals the firm's potential for consistent earnings, its capacity to harness different economic cycles, and its overall growth prospects.International market involvement serves as insurance against economic downturns at home and enables engagement with economies that are growing more quickly. Still, this move toward diversification is not without its challenges, as it involves navigating through the fluctuations of currencies, geopolitical threats, and the distinctive nature of various markets.While delving into TXN's performance for the past quarter, we observed some fascinating trends in the revenue from its foreign segments that are commonly modeled and observed by analysts on Wall Street.The company's total revenue for the quarter stood at $4.15 billion, declining 8.4% year over year. Now, let's delve into TXN's international revenue breakdown to gain insights into the significance of its operations beyond home turf. Trends in TXN's Revenue from International MarketsRest of Asia generated $431 million in revenues for the company in the last quarter, constituting 10.4% of the total. This represented a surprise of +0.46% compared to the $429.03 million projected by Wall Street analysts. Comparatively, in the previous quarter, Rest of Asia accounted for $417 million (10.9%), and in the year-ago quarter, it contributed $571 million (12.6%) to the total revenue.During the quarter, Europe, Middle East and Africa contributed $880 million in revenue, making up 21.2% of the total revenue. When compared to the consensus estimate of $1.04 billion, this meant a surprise of -15.04%. Looking back, Europe, Middle East and Africa contributed $898 million, or 23.5%, in the previous quarter, and $952 million, or 21%, in the same quarter of the previous year.China accounted for 19.8% of the company's total revenue during the quarter, translating to $823 million. Revenues from this region represented a surprise of +10.77%, with Wall Street analysts collectively expecting $743.01 million. When compared to the preceding quarter and the same quarter in the previous year, China contributed $745 million (19.5%) and $1.88 billion (41.5%) to the total revenue, respectively.Of the total revenue, $313 million came from Japan during the last fiscal quarter, accounting for 7.5%. This represented a surprise of -14.07% as analysts had expected the region to contribute $364.26 million to the total revenue. In comparison, the region contributed $292 million, or 7.6%, and $338 million, or 7.5%, to total revenue in the previous and year-ago quarters, respectively.Rest of World generated $65 million in revenues for the company in the last quarter, constituting 1.6% of the total. This represented a surprise of -13.22% compared to the $74.9 million projected by Wall Street analysts. Comparatively, in the previous quarter, Rest of World accounted for $62 million (1.6%), and in the year-ago quarter, it contributed $161 million (3.6%) to the total revenue. Revenue Projections for Overseas Markets It is projected by analysts on Wall Street that Texas Instruments will post revenues of $3.86 billion for the ongoing fiscal quarter, a decline of 5.4% from the year-ago quarter. The expected contributions from Rest of Asia, Europe, Middle East and Africa, China, Japan and Rest of World to this revenue are 11.5%, 26.5%, 19.4%, 9% and 1.8%, translating into $441.76 million, $1.02 billion, $746.55 million, $348.99 million and $71.02 million, respectively.For the full year, a total revenue of $15.52 billion is expected for the company, reflecting a decline of 11.4% from the year before. The revenues from Rest of Asia, Europe, Middle East and Africa, China, Japan and Rest of World are expected to make up 10.9%, 25.2%, 18.4%, 8.6% and 1.8% of this total, corresponding to $1.69 billion, $3.91 billion, $2.86 billion, $1.34 billion and $271.92 million respectively. In Conclusion Relying on international markets for revenues, Texas Instruments faces both prospects and perils. Thus, tracking the company's international revenue trends is essential for accurately projecting its future trajectory.With the increasing intricacies of global interdependence and geopolitical strife, Wall Street analysts meticulously observe these patterns, especially for companies with an international footprint, to tweak their forecasts of earnings. Importantly, several additional factors, such as a company's domestic market status, also impact these earnings forecasts.At Zacks, we place significant importance on a company's evolving earnings outlook. This is based on empirical evidence demonstrating its strong influence on a stock's short -term price movements. Invariably, there exists a positive relationship -- an upward revision in earnings estimates is typically mirrored by a rise in the stock price.Our proprietary stock rating tool, the Zacks Rank, with its externally validated exceptional track record, harnesses the power of earnings estimate revisions to serve as a dependable measure for anticipating the short-term price trends of stocks.Currently, Texas Instruments holds a Zacks Rank #3 (Hold), signifying its potential to match the overall market's performance in the forthcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> Exploring Recent Trends in Texas Instruments' Stock Price Over the past month, the stock has lost 1.1% versus the Zacks S&P 500 composite's 2% increase. The Zacks Computer and Technology sector, of which Texas Instruments is a part, has risen 2.2% over the same period. The company's shares have increased 10.4% over the past three months compared to the S&P 500's 7.9% increase. Over the same period, the sector has risen 7.7%.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. 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