What To Expect From Texas Instruments’ Q4
Texas Instruments (NYSE:TXN) is set to report its Q4 2017 earnings on January 23. The company reported strong numbers for Q3, as both revenue and EPS beat expectations driven by strong demand in the automotive and industrial segments. Additionally, its gross margin touched a high of 64.5% in Q3 2017, while operating profit also grew on the back of an increasing proportion of analog production at 300mm fabrication facilities. We expect the growth momentum to continue into Q4 2017 as well, as the industrial and automotive markets should boost the top line yet again. We expect the company to report revenues in excess of $3.85 billion as TI’s sales continue to gain traction in the industrial and automotive markets, where semiconductor demand is high. We have created an interactive dashboard that illustrates our expectation from various divisions. You can modify the revenue and contribution profit expectations for each division to see how the EPS will be affected in Q4.
For Q4, we expect:
- Analog revenues to grow by around 9% y-o-y to about $2.5 billion as TI shifts an increasing proportion of analog production to the 300mm production facilities to cater to growing industrial and automotive markets.
- Embedded revenues are expected to grow to $900 million due to growth across product lines, Processors, and Connected Microcontrollers.
- Margins are set to grow again as the company continues to increase its production from its 300mm plants.
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Our Texas Instruments’ stock price estimate of $79 is below the current market price.
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