Chips Bracing For Texas Instruments Earnings (TXN)

Texas Instruments Inc. (NYSE: TXN) is set to report earnings after today’s close.  It may very well take the back seat compared to the attention that Apple will get, but this will be one of the chip stocks to watch for the sector as a whole.  We’ve already seen Intel & AMD results.  TI gave guidance at the start of December with revenues between $3.5 to $3.66 Billion and an EPS range of $0.50 to $0.54.

Estimates have actually climbed slightly since its December guidance, despite lackluster earnings elsewhere.  First call has analysts pegged at $0.52 EPS on $3.58 Billion in revenues.  Next quarter estimates are $0.45 EPS on $3.41 Billion in revenues.  Options are in the middle of a strike range so it is not exact as to what traders are looking at today.  It appears that options traders are braced for a move of about $1.20 in either direction, but this may be off a bit.

Analysts are mixed on this stock, although the average price target still appears to be north of $38.00.  Perhaps this monster stock repurchase program is still viewed very optimistic by Wall Street.

Texas Instruments shares are trading down 2% at $28.87 late morning, and the 52-week trading range is actually $28.25 to $39.63.  Shares did actually put in a brief 52-week low today of $28.00 right after the open, so that 52-week trading range will change after today.

After TI’s last guidance, shares rose almost 4% to $33.94, so you can see it has also had a tough 5-weeks with shares down almost 17% since then.

Jon C. Ogg
January 22, 2008