Q4 Preview: In-Line Results Seen for Texas Instruments (TXN) But Outlook Brightens Up

Shares of Texas Instruments (NYSE: TXN) are trading down roughly 1.09 percent Monday ahead of the release of its fourth-quarter results after the closing bell.

The Wall Street quarterly consensus for Texas Instruments is $0.39 per share in earnings on $3.25 billion in sales. During the fourth quarter of last year, the company reported earnings of $0.78 per share on $3.52 billion in total sales. On December 8, 2011 the company lowered its fourth quarter earnings and sales expectation ranges from $0.28-$0.36 and $3.26-$3.54 billion to $0.21-$0.25 and $3.19-$3.33 billion due to weaker than previously expected demand across a majority of the markets.

For the full year 2011, analysts on the Street are currently estimating $2.12 per share in earnings on $13.57 billion in total sales.

The fourth quarter conference call is scheduled for 5:30 pm ET.

According to data from Bloomberg, shares of Texas Instruments have 23 Buy ratings, 16 Hold ratings and four Sell ratings. The average price target on shares of TXN is $32.50 with a range from $22 to $40.

Analyst Comments:

Wudbush raised its price target on the company from $36 to $40 going into earnings tonight as the firm forecasts non-disappointing first quarter guidance for fiscal 2012 due to improving fundamentals. The firm expects fourth quarter figures to be largely inline with the company’s updated guidance on December 8th encourages investors to buy shares ahead of the report. Wedbush is reiterating its Outperform rating on the company's shares.

An analyst at Wedbush comments, "While we continue to forecast a moderate recovery for the overall semiconductor industry, we believe TI will likely outgrow the overall industry driven by analog share gains, increasing silicon content in the mobile market, and synergies from the National acquisition."

For the quarter, Wedbush estimates earnings of $0.38 per share on $3.255 billion in sales.

Goldman Sachs remains Neutral on the stock going into the quarter's results, but is bullish going into the next fiscal year and quarter. The firm believes fourth quarter results will be largely in-line with the company's updated guidance and Street's consensus. For the first quarter of fiscal 2012, the firm's estimates are 13 percent above the Street's as they estimate a majority of analysts are underestimating gross margin expansion through the year.

Texas Instruments remains JPMorgan's top pick in the semiconductor industry. The firm predicts fourth quarter results will end up coming inline with the Street’s expectations as estimates are already extremely low. For the first quarter, JPMorgan anticipates guidance will be below typical seasonal trends but inline with expectations.

An analyst at JPMorgan reports, "We continue to believe the bulk of the estimate reductions are already reflected in Consensus estimates, which have been cut on average by 26%. As a result, we expect semiconductor stocks to continue to grind higher despite small estimate cuts."

JPMorgan reaffirmed its Overweight rating on the company going into the quarter and raised its price target from $33 to $39.

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