For the recently ended quarter, the strength of Texas Instruments’ product portfolio is expected to mitigate the risks from the competition that it is facing in the industrial and automotive end markets. The uncertainty in the macro environment and the broad-based weakness in the overall demand is likely to affect TI’s third quarter results.
In the second quarter of 2019, Texas Instruments topped analysts views. The company also guided in-line guidance for Q3. The Dallas, Texas-based company had forecasted third quarter revenue to come in the range of $3.65 billion to $3.95 billion and earnings in the range of $1.31 to $1.53 per share, which includes an estimated $10 million discrete tax benefits.
During the second quarter earnings call, TI stated that it didn’t experience any shift in its market share because of the tension between China and the US as the company’s diversity and longevity helped it to overcome the situation. Huawei accounts about 3% to 4% of TI’s revenue and the company stated that there is nothing unusual going on in China.
Last month, the board of Texas Instruments increased quarterly cash dividend by 17% to $0.90 per share, payable on November 18, 2019, to stockholders of record on October 31, 2019. This dividend increase reflects the company’s strong free cash flow generation. In the 12-month period ending June 2019, Texas Instruments has paid 47% of its free cash flow in dividends.
Other chip companies that have scheduled their quarterly earnings in the next week include Teradyne (NASDAQ: TER), Xilinx (NASDAQ: XLNX), Lam Research (NASDAQ: LRCX) and Intel (NASDAQ: INTC). Almost all the semiconductor companies in the Philadelphia Semiconductor Index were trading in the negative territory today.
TXN stock, which reached a fresh 52-week high on Tuesday, was down about 1% during the midday trading. Shares of Texas Instruments have advanced 36% in the year-to-date period and 29% since this time last year.