Texas Instruments (NASDAQ: TXN) released its fourth quarter report and 2014 earnings on January 26th, most of which was in line with Wall Street estimates.
The semiconductor company most known for their graphing calculators posted Q4 revenue of $3.27 billion, up 8% year-over-year. A vast majority of the quarterly revenue came from both the Analog and Embedded Processing segments. TXN posted GAAP diluted earnings per share of $0.76, up 65% year-over-year. CEO Rich Templeton stated that revenue and EPS growth were “consistent” with expectations and resulted from “another strong quarter of execution.” Operating profit and net income also saw substantial year-over-year increases of 60% and 61%, respectively.
For the full year of 2014, Texas Instruments posted revenue of $13.045 billion, a 6.9% year-over-year increase. Diluted earnings per share increased from $1.91 in 2013 to $2.57 in 2014. For the full year, Templeton noted that Texas Instruments “returned $4.2 billion to shareholders… through stock repurchases and dividends.”
Looking forward, Texas Instruments expects to post revenue of $3.07 billion to $3.33 billion and EPS of $0.57 to $0.67 for the first quarter of 2015. The midpoint in the revenue window would result in a 7% year-over-year increase in sales.
On January 27th, analyst John W. Pitzer of Credit Suisse reiterated a Neutral rating on TXN and raised his price target from $50 to $55. Acknowledging that most of the Q4 report was in-line with estimates, Pitzer added, “Excluding one-times, we view TXN as a solid meet to slightly beat [reported guidance].” The analyst continued, “While TXN is gaining share, we see results as largely consistent with sustainable industry growth as echoed by solid reports from LLTC and MXIM and what we expect to be solid reports from other more diversified companies in the following 10 days.” Pitzer raised his 2015 GAAP EPS estimate to $3.04 from $3.00 and initiated a 2016 EPS of $3.28. He added, “Despite strong operating performance over the last two years, we continue to see margin leverage especially as Embedded (20.5% of [revenue]) drives margin leverage from 17.0% in C4Q to a more targeted range of 20- 25%.”
John Pitzer has rated TXN 9 times since April 2011 with a 100% success rate recommending the stock and a +24.8% average return per TXN recommendation. Overall, Pitzer has a success rate of 74% recommending stocks with an average return of +22.9% per recommendation.
Mark Lipacis of Jefferies maintained a Buy rating on TXN and raised his price target from $59 to $64 on January 27th.Lipacis noted, “TXN’s Analog sales have outgrown its peers since 2010, and this relative growth accelerated over the course of 2013 and 2014. We think TXN’s scale and product diversification will enable it to continue capturing share within and across growth verticals.” The analyst raised his 2015 EPS estimate from $2.97 to $2.05, and raised his 2016 EPS estimate from $3.28 to $3.56.
Mark Lipacis has rated TXN 12 times since September 2009 with a 100% success rate recommending the stock and a +21.8% average return per TXN recommendation. Overall, Lipacis has a 78% success rate recommending stocks and a +15.6% average return per recommendation.
On average, the top analyst consensus for Texas Instruments on TipRanks is Hold.