Dallas-based Texas Instruments (TXN) reported fiscal 3rd quarter earnings for 2010 after the closing bell Monday. Texas Instruments beat estimates on both the top and bottom lines: revenues came in at $3.74 billion for the quarter and EPS of 71 cents per share, topping the Zacks Consensus Estimates of $3.69 billion and 69 cents per share, respectively. Year over year EPS growth is up an impressive 69% from 42 cents per share in the 3rd quarter of 2009.
Although Texas Instruments had a relatively eventful quarter — TXN sold its cable modem business to Intel (INTC) in August, upped its dividend and announced the development of the first 0.9-volt microcontroller for electric toothbrushes, razors, etc. — analysts had scarcely put a dent in their earnings estimates over the course of the quarter. The 69 cents per share estimate had not wavered over the past 90 days, and the full-year 2010 EPS consensus estimate of $2.47 is down just a penny from the start of the quarter.
Texas Instruments’ CEO Rich Templeton cited growth in all company segments for the quarter, especially industrial market demand. Templeton conceded that consumer demand had cooled in the quarter. For the 4th quarter, Texas Instruments expects revenues between $3.36 and $3.64 billion, on EPS between 59 and 67 cents per share.
Regarding the lower estimates, Temple said this was “reflecting a combination of seasonal patterns, continued soft demand in computing and consumer markets, and slowing growth in the industrial market.” The Zacks Consensus Estimates for next quarter are $3.49 billion in revenues and 63 cents per share.
The positive earnings surprise of 2.89% is a tad below the average of 5.26% over the previous four quarters, but an improvement of the earnings meet of 62 cents in TXN’s fiscal 2nd quarter.
Texas Instruments expects to gain market share with its recently obtained manufacturing facilities in China and Japan. Currently, TXN shares carry a Zacks #3 Rank (Hold), which is supported by its longer-term Neutral recommendation.
An in-depth review of Texas Instruments will be released before the opening bell Tuesday.
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