TI Earnings Confusion Over Charges (TXN)

Texas Instruments Inc. (NYSE: TXN) is out with its earnings for the fourth quarter.  The chip giant reported earnings of $0.25 EPS on $3.42 billion in revenues in what feels a bit confusing for most earnings reports from large technology companies.  Thomson Reuters had estimates of $0.39 EPS and $3.25 billion in sales.  The earnings figure that should be used is $0.48 EPS because it noted $0.16 in acquisition charges tied to National Semi and also $0.07 in charges tied to closing old facilities.

The company offered preliminary quarterly guidance of $0.16 to $0.24 EPS  $3.02 to $3.28 billion, but that earnings figure includes charges as well of at least $0.10.  Thomson Reuters has estimates of $0.41 EPS and $3.22 billion in revenues.

Here is a quote calling the bottom of the downturn: “”Revenue in the fourth quarter was higher than expected across all our major product lines, reinforcing our belief that we’re at the bottom of this downturn.  I’m pleased to say that despite the downturn and the lower factory utilization that came with it, cash flow from operations was strong and well above levels as compared with similar points in prior downturns.

Shares bounced up with the rest of the sector last week.  Shares closed down 1.3% at $33.19 today on about 30% above-normal trading volume  and its 52-week trading range is $24.34 to $36.71.  The stock initially fell by more than this because the headline earnings looked light for machines which trade shares based solely on headlines.  The stock is actually down only about $0.04  at $33.15 in the after-hours session.

JON C. OGG