Texas Instruments (TXN) Q4 'Beats', But Guidance Succumbs to Weakness as Visibility Dims

January 22, 2013 5:13 PM EST
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Texas Instruments (NASDAQ: TXN) stock is active in after-hours trading on Tuesday following the release of the company's Q4 earnings report. While results topped estimates, Texas instruments reported guidance that fell short of Street expectations, creating volatility as investors weighed the outcome. Shares eventually settled lower by 0.8 percent.

Revenue for the quarter came in at $2.98 billion versus the consensus estimate of $2.95 billion. In the comparable quarter last year, Texas Instruments reported revenue of 3.42 billion, representing a year-over-year declined of 13 percent. Texas Instruments (NASDAQ: TXN) reported Q4 EPS of $0.36, $0.02 better than the analyst estimate of $0.34.

Texas Instruments CEO Rich Templeton blamed the shortfall on the weak environment. This didn’t come as a surprise to investors, but its weak guidance may have surprised some. Texas Instruments sees Q1 2013 EPS of $0.24-0.32, versus the consensus of $0.34. Texas Instruments sees Q1 2013 revenue of $2.69-2.91 billion, versus the consensus of $2.89 billion.

Templeton summarized the results as follows:

"Our visibility into future demand remains limited as our lead times are short and our customers are reluctant to commit to extended backlog. On the positive side, we believe customers and distributors are operating with lean inventory. Our own operations are disciplined and performing well, with gross margin up despite increased underutilization costs, and with operating expenses down from a year ago."

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