Texas Instruments's (NASDAQ:TXN) Q2 Sales Top Estimates But Stock Drops
Is now the time to buy Texas Instruments? Find out in our full research report.
Texas Instruments (TXN) Q2 CY2025 Highlights:
Revenue: $4.45 billion vs analyst estimates of $4.36 billion (16.4% year-on-year growth, 2% beat)
EPS (GAAP): $1.41 vs analyst estimates of $1.33 (5.8% beat)
Revenue Guidance for Q3 CY2025 is $4.63 billion at the midpoint, roughly in line with what analysts were expecting
EPS (GAAP) guidance for Q3 CY2025 is $1.48 at the midpoint, roughly in line with what analysts were expecting
Operating Margin: 35.1%, up from 32.7% in the same quarter last year
Free Cash Flow Margin: 12.5%, similar to the same quarter last year
Inventory Days Outstanding: 234, down from 243 in the previous quarter
Market Capitalization: $194.9 billion
Company Overview
Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ:TXN) is the world's largest producer of analog semiconductors.
Revenue Growth
Reviewing a company's long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Unfortunately, Texas Instruments's 4% annualized revenue growth over the last five years was sluggish. This fell short of our benchmark for the semiconductor sector and is a tough starting point for our analysis. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.
Long-term growth is the most important, but short-term results matter for semiconductors because the rapid pace of technological innovation (Moore's Law) could make yesterday's hit product obsolete today. Texas Instruments's performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 5.9% annually.
This quarter, Texas Instruments reported year-on-year revenue growth of 16.4%, and its $4.45 billion of revenue exceeded Wall Street's estimates by 2%. Company management is currently guiding for a 11.4% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 10.6% over the next 12 months, an improvement versus the last two years. This projection is particularly healthy for a company of its scale and implies its newer products and services will fuel better top-line performance.
Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.
Product Demand & Outstanding Inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business' capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, Texas Instruments's DIO came in at 234, which is 57 days above its five-year average. These numbers suggest that despite the recent decrease, the company's inventory levels are higher than what we've seen in the past.
Key Takeaways from Texas Instruments's Q2 Results
While Texas Instruments beat analysts' revenue and EPS expectations this quarter, revenue and EPS estimates for next quarter were just in line. It seems that the market was hoping for the strength this quarter to be reflected in the guide, and as a result, shares traded down 7.2% to $199.50 immediately following the results.
So should you invest in Texas Instruments right now? If you're making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it's free.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
4 minutes ago
- Yahoo
Why Starbucks (SBUX) is Gaining Attention Among Food Dividend Investors
Starbucks Corporation (NASDAQ:SBUX) is included among the 10 Best Food Stocks with Dividends. A close-up of a freshly roasted coffee bean, accompanied by a vintage aluminum scoop. The company seems to be reaching a key turning point with Brian Niccol stepping in as CEO, drawing comparisons to the company's 2008 revival under Howard Schultz. A major focus under his leadership is improving the mobile ordering system, which now accounts for roughly 30% of US sales but has negatively impacted service quality and the in-store experience. To tackle this issue, Starbucks Corporation (NASDAQ:SBUX) brought in Meredith Sandland— former Taco Bell executive and founder of Empower Delivery— to enhance order sequencing through machine learning. The move highlights Niccol's strategic focus on assembling strong, capable teams. Starbucks Corporation (NASDAQ:SBUX) is a strong dividend payer, having paid regular dividends to shareholders for 60 consecutive quarters. During this time, the company's dividend has grown at an average annual rate of 20%, with increases sustained for 14 straight years. It offers a quarterly dividend of $0.61 per share and has a dividend yield of 2.58%, as of July 27. While we acknowledge the potential of SBUX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: READ NEXT: and Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 minutes ago
- Yahoo
What Makes The Hershey Company (HSY) a Stable Food Dividend Stock?
The Hershey Company (NYSE:HSY) is included among the 10 Best Food Stocks with Dividends. A close-up of hands deftly moulding a bar of chocolate. The Hershey Company (NYSE:HSY) is a well-known consumer staples company primarily recognized for its confections and snacks. While the company has broadened its product range to include items like popcorn and pretzels, chocolate remains one of its core offerings. Seen as an affordable indulgence, Hershey's chocolate continues to be highly popular, driving steadily increasing sales over time. The Hershey Company (NYSE:HSY) recently revealed it will increase prices for the second time in just over a year, attributing the hike to ongoing high cocoa costs that will lead to a double-digit rise in candy prices. While cocoa prices have dropped from their record high of $12,000 per metric ton, they still trade above $8,000 per metric ton. Many analysts expect these elevated prices to persist in the near term, largely due to last year's adverse weather conditions in Western Africa. The Hershey Company (NYSE:HSY) is also a strong dividend payer, having raised its payouts for 15 consecutive years. The company offers a quarterly dividend of $1.37 per share and has a dividend yield of 2.93%, as of July 27. While we acknowledge the potential of HSY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: READ NEXT: and Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 minutes ago
- Yahoo
General Mills (GIS): A Food Dividend Stock Worth Watching
General Mills, Inc. (NYSE:GIS) is included among the 10 Best Food Stocks with Dividends. A worker in a production facility packaging arbitrary food products, reflecting the company's commitment to comprehensive production standards. The company's top priority for fiscal 2026 is to revive organic sales growth driven by volume. To achieve this, it plans to increase investments in consumer value, product innovation, brand building, and new offerings— all guided by its established experience framework. A key highlight includes the national rollout of Blue Buffalo's fresh pet food line, expected in late 2025. In addition, the company aims to deliver strong cost savings through its Holistic Margin Management program and enhance efficiency through a global transformation initiative, freeing up more resources to support growth. General Mills, Inc. (NYSE:GIS) reported mixed earnings in fiscal Q4 2025, with revenues of $4.56 billion, down 3.3% from the same period last year. However, the company's cash position remained strong. The company generated $2.9 billion in operating cash flow, which amounted to 126% of after-tax earnings, while free cash flow represented 97% of adjusted after-tax earnings. Dividend payments declined by 2% to $1.3 billion, primarily due to a reduced average number of shares outstanding. On June 25, General Mills, Inc. (NYSE:GIS) declared a 1.7% hike in its quarterly dividend to $0.61 per share. This was the company's fourth consecutive year of dividend growth. In addition, it has paid regular dividends to shareholders for 126 years in a row. The stock has a dividend yield of 4.78%, as of July 27. While we acknowledge the potential of GIS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: READ NEXT: and Disclosure: None.
