Texas Instruments (TXN) reported another modest positive quarterly surprise in its 1st quarter 2010 earnings report, released after the market closed today. Earnings of 52 cents per share beat the Zacks Consensus Estimate by a penny, on roughly $3.2 billion in sales for the quarter.
Year-over-year comparisons are impressive — revenues grew over 50% and EPS quadrupled from TXN’s 1st quarter 2009 — but quite expected. But the real headline in the Texas Instruments earnings story for the quarter is the hefty raise in guidance: TXN now expects EPS in its 2nd quarter within the 56 – 64 cent range, easily clearing the Zacks Consensus Estimate of 53 cents for next quarter.
Consider also that Texas Instruments’ earnings beat has happened following upwardly revised estimates of notable Agreement and Magnitude. Six of 32 analysts covering TXN in the quarter had revised estimates in a positive direction over the past month, and 7 of 35 had done so for full-year 2010 over the same time period. No analyst had revised their estimates downward in the past 30 days.
Plus, as of the start of the 1st quarter, the Zacks Consensus Estimate expected 43 cents per share. Thus, the consensus magnitude had risen 9% over the past 90 days, and TXN still beat it.
It is reasonable to expect a high number of upward revisions in the near term for Texas Instruments. Prior to the earnings report, 2nd quarter EPS according to the Zacks consensus was 53 cents per share. For the full year, $2.10 remains the consensus number for now. And significant upward estimate revisions may result in an improvement in TXN’s Zacks Rank, which currently stands at #3 (Hold).
Texas Instruments shares had gone up 49 cents to $27.16 as of the closing bell today. Thus far in the after-market, shares have risen an additional 20 cents. Overall, not a bad day for TXN shareholders.
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