Texas Instruments Q3 Earnings: Will higher chip demand offset decline in analog segment?

Semiconductor company Texas Instruments (NASDAQ:TXN) is expected to announce its third quarter earnings on Tuesday, October 22nd, after markets close. Analysts expect a decline in revenue, with the semiconductor industry facing a downturn in recent quarters.

Although the industry has been slowly recovering by the surge in demand for artificial intelligence chips, Texas Instruments still faces headwinds. Analysts expect the recovery in analog to be uneven, as automotive and industrial supply chains are likely to see a “softer than seasonal” December quarter.

The consensus EPS Estimate is $1.41, and analysts expect the company to report a 9.1% year-over-year decline in revenue, at $4.12B.

SA analyst Oliver Rodzianko believes Q3 is expected to be weak for Texas Instruments, driven by declines in the Analog and Embedded Processing segments, but pointed out that Personal Electronics and Communication Equipment segments show strength.

“TI is a stable company, but I believe its current valuation is not. While 2025 is likely to deliver robust growth for the business, I expect we could see a contraction in its enterprise value toward the end of the year,” Rodzianko added.

Texas Instruments (TXN) reported an EPS of $1.22 last quarter, with revenue of $3.82B. The company expects third quarter revenue in the range of $3.94 billion to $4.26 billion, and earnings per share between $1.24 and $1.48.

Over the last 3 months, EPS estimates have seen 7 upward revisions and 5 downward. Revenue estimates have seen 11 upward revisions and 13 downward.

Texas Instruments (TXN) stock has gained 15.7% so far this year, compared to an over 22% gain in the broader S&P 500 Index.