Texas Instruments Earnings Approach

S&P 500 (NYSE:SPY) component Texas Instruments (NASDAQ:TXN) will unveil its latest earnings on Monday, October 22, 2012. 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 profit of 45 cents per share, a decline of 25% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 48 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 45 cents during the last month. Analysts are projecting profit to rise by 22.4% compared to last year’s $1.66.

Past Earnings Performance: Last quarter, the company beat estimates by 5 cents, coming in at net income of 44 cents a share versus the estimate of profit of 39 cents a share. It marked the fourth straight quarter of beating estimates.

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A Look Back: In the second quarter, profit fell 33.6% to $446 million (38 cents a share) from $672 million (56 cents a share) the year earlier, but exceeded analyst expectations. Revenue fell 3.6% to $3.33 billion from $3.46 billion.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.92 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 2.61 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 31.4% to $3.82 billion while assets decreased 3.1% to $7.35 billion.

Wall St. Revenue Expectations: Analysts predict a decline of 3.7% in revenue from the year-earlier quarter to $3.34 billion.

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 7.3% in the third quarter of the last fiscal year, 3% in fourth quarter of the last fiscal year and 8% in the first quarter and then fell again in the second quarter.

The company is trying to stem some negative momentum heading into this earnings announcement. Profit has dropped by a year-over-year average of 48.1% over the past four quarters.

Analyst Ratings: There are mostly holds on the stock with 20 of 35 analysts surveyed giving that rating.

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

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