On Wednesday, July 21, Texas Instruments (NASDAQ:TXN) will release its latest earnings report. Benzinga’s report can help you figure out the ins and outs of the earnings release.
What Are Earnings, Net Income, And Earnings Per Share?
Earnings and especially earnings per share (EPS) are useful measures of a company’s profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.
Earnings And Revenue
Texas Instruments EPS will likely be near $1.82 while revenue will be around $4.35 billion, according to analysts. In the same quarter last year, Texas Instruments reported earnings per share of $1.48 on sales of $3.24 billion.
Why Analyst Estimates And Earnings Surprises Are Important
Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the “consensus estimates.” A company posting earnings or revenue above or below the consensus estimate is known as an “earnings surprise” and may move the stock by a considerable margin.
If the company were to match the consensus estimate, earnings would be up 22.97%. Sales would be have grown 34.3% from the same quarter last year. In comparison to analyst estimates in the past, here is how the company’s reported EPS stacks up:
| Quarter | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 |
|---|---|---|---|---|
| EPS Estimate | 1.58 | 1.34 | 1.27 | 0.86 |
| EPS Actual | 1.87 | 1.80 | 1.45 | 1.48 |
| Revenue Estimate | 3.99 B | 3.60 B | 3.43 B | 2.91 B |
| Revenue Actual | 4.29 B | 4.08 B | 3.82 B | 3.24 B |
Stock Performance
Shares of Texas Instruments were trading at $186.24 as of July 19. Over the last 52-week period, shares are up 40.56%. Given that these returns are generally positive, long-term shareholders are probably happy going into this earnings release.
Do not be surprised to see the stock move on comments made during its conference call. Texas Instruments is scheduled to hold the call at 16:30:00 ET and can be accessed here.
