Texas Instruments Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Texas Instruments (NASDAQ:TXN) will unveil its latest earnings tomorrow, Tuesday, January 22, 2013. Texas Instruments designs and makes semiconductors that it sells to electronics designers and manufacturers all over the world.

Texas Instruments Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 33 cents per share, a decline of 19.5% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 41 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 33 cents during the last month. Analysts are projecting profit to rise by 23.4% versus last year to $1.64.

Past Earnings Performance: Last quarter, the company beat estimates by 7 cents, coming in at profit of 52 cents a share versus the estimate of net income of 45 cents a share. It marked the fourth straight quarter of beating estimates.

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A Look Back: In the third quarter, profit rose 30.4% to $784 million (67 cents a share) from $601 million (51 cents a share) the year earlier, exceeding analyst expectations. Revenue fell 2.2% to $3.39 billion from $3.47 billion.

Here’s how Texas Instruments traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

TXN

Wall St. Revenue Expectations: Analysts predict a decline of 13.7% in revenue from the year-earlier quarter to $2.95 billion.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.51 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands.

Key Stats:

On the top line, the company is hoping to use this earnings announcement to snap a string of four-straight quarters of revenue decreases. Revenue fell 3% in the fourth quarter of the last fiscal year, 8% in first quarter and 3.6% in the second quarter and then fell again in the third quarter.

Last quarter’s earnings rise was a switch from preceding drops, so the upcoming earnings announcement is a chance to build on last quarter’s result. Net income fell in the fourth quarter of the last fiscal year, the first quarter and the second quarter before snapping that run with a profit increase in the third quarter.

Analyst Ratings: With 11 analysts rating the stock as a buy, six rating it as a sell and 17 rating it as a hold, there are indications of a bullish outlook.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)