Texas Instruments, Q4 Earnings Surprise Thanks to Conservative Guidance

[Asia Economy Reporter Eunmo Koo] Texas Instruments recorded an earnings surprise in the fourth quarter of last year. However, the results were not considered encouraging due to conservative guidance.

According to Samsung Securities on the 26th, Texas Instruments' fourth-quarter revenue last year was $3.35 billion, and earnings per share (EPS) were $1.12, exceeding consensus estimates by 2.6% and 9.4%, respectively. However, the performance was not regarded as encouraging. Junho Moon, a researcher at Samsung Securities, explained, “Revenue fell 10% compared to the same period last year, marking the fifth consecutive quarter of decline,” and added, “It appears that the fourth quarter was more of a phase of bottoming out rather than a significant improvement in the industry.”

For the first quarter of this year, revenue is expected to range between $3.12 billion and $3.38 billion, with EPS projected between $0.96 and $1.14, reflecting guidance at consensus levels. Researcher Moon stated, “Although the guidance is conservative, forecasting a year-over-year revenue decline again next quarter, the company’s stance is judged to have improved compared to the third-quarter earnings announcement last year.”

He continued, “The company evaluated the fourth quarter of last year as a period of demand stabilization and explained that most of the inventory accumulated by customers and channels during 2017?2018 has been depleted, suggesting that the company effectively established a bottom in the fourth quarter of last year.”

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