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Investors Cheer for Texas Instruments’ Upbeat Q2 Results

Story Highlights

With support from growth across all markets, Texas Instruments has boosted investors’ confidence by delivering better-than-expected Q2 results.

Texas Instruments Incorporated (NASDAQ: TXN) has delighted investors with strong earnings results for the second quarter of 2022. Following the encouraging results, shares of TXN rose 2.7% in Tuesday’s extended trading session.

The semiconductor maker has reported earnings of $2.45 per share, up 20% year-over-year. The metric also surpassed the consensus estimate of $2.13 per share.

Total revenues stood at $5.21 billion, up 14% year-over-year, surpassing the Street estimate of $4.61 billion. The company saw growth across markets in the second quarter. Revenues from the Industrial market rose in the high-single digits and those from the Automotive market jumped over 20% year-over-year. Revenue from communications equipment surged 25% in the second quarter, and enterprise systems’ revenues grew in the mid-teens versus the same quarter last year.

Meanwhile, the company saw weakness in revenues from personal electronics, which increased in the low-single digits in the reported quarter.

Texas Instruments also witnessed year-over-year growth across all its business segments. Revenue of the Analog segment was up 15%, the Embedded Processing segment’s revenue rose 5%, and revenues of the Other segment jumped 19% during the reported quarter.

Gross margin came in at 69.7%, up 240 basis points year-over-year.

During the quarter, the company paid dividends worth $1.1 billion and repurchased shares worth $1.2 billion.

TXN’s Q3 Outlook Looks Encouraging

The company’s outlook for the third quarter of 2022 looks quite decent. It expects revenue in the range of $4.90-$5.30 billion and earnings per share between $2.23 and $2.51. Analysts expect the company to post revenues of $4.97 billion and earnings of $2.26 per share in the third quarter.

Wall Street Is Neutral on TXN Stock

Wall Street has taken a Neutral stance on Texas Instruments, as it carries a Hold rating based on four Buys, seven Holds, and two Sells. TXN’s average price target of $177.77 signals that the stock may surge nearly 10.5% from current levels. Shares of the company have fallen 14.5% so far in 2022.

According to TipRanks, financial bloggers are 83% Bullish on Texas Instruments, compared to the sector average of 66%. The news sentiment is also Positive for the stock.

Concluding Thoughts

Texas Instruments’ presence in diverse end-markets is a positive for the stock. The consistently encouraging performances from the Automotive and Industrial markets have been supporting the company’s top line. Moreover, TXN’s continued focus on improving manufacturing efficiencies should keep boosting the stock in the long term.

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