Texas Instruments investor day likely to overshadow Q4 earnings, BofA says
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Texas Instruments (NASDAQ:TXN) is scheduled to report fourth-quarter earnings on January 25, but next month's investor day is likely to overshadow earnings, Bank of America said in an investor note.
Analyst Vivek Arya, who has a buy rating and a $225 price target, noted that while earnings will "likely set the mood" for the semiconductor industry, Texas Instrument's (TXN) management will keep most of the upbeat commentary for the capital management day, where it's expected to address "key uncertainties."

The analyst added that Texas Instruments, led by Rich Templeton, could discuss its buyback strategy, especially considering the stock is down 13% from its peak. It could also discuss how it intends to spend its $36 billion for fabs over the next several years and what impact, if any, that will have on gross margins, as well as potential tax credits that could come from the yet to be passed FABS Act.
Concerning the fourth-quarter, Arya estimates Texas Instruments to report sales of $4.4 billion, earning $1.88 a share, 7 cents below Wall Street estimates due to a $75 million restructuring charge.
"That being said, we believe the setup into earnings is substantially de-risked, given the stocks 400bps underperformance vs the SOX since it reported last Q and conservative Q4 sales guidance which implies -5% QoQ decline, substantially below peers (MCHP, ADI) which guided their quarters up 3-6%," Arya wrote in the note to clients.
Texas Instruments shares are down fractionally to $175.63 in pre-market trading.
There are several factors that could help boost optimism, including strengthening auto unit production; a positive pre-announcement from STMicroelectronics (NYSE:STM) and Taiwan Semiconductor (NYSE:TSM), with both citing strong demand, along with updates from On Semiconductor (NASDAQ:ON) and Analog Devices (NASDAQ:ADI) showing no cancellations; stabilization of Apple's (NASDAQ:AAPL) supply constraints; and above seasonal growth in global analog sales.
Last week, Texas Instruments (TXN) declared a $1.15 per share dividend, in-line with previous results. The dividend is payable February 7 for shareholders of record as of January 31.