Benzinga | Jan 25, 2021 10:11AM EST

Earnings Preview for Texas Instruments

Texas Instruments (NASDAQ:TXN) unveils its next round of earnings this Tuesday, January 26. Get prepared with Benzinga's ultimate preview for Texas Instruments's Q4 earnings.

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

Sell-side analysts expect Texas Instruments's EPS to be near $1.34 on sales of $3.60 billion. In the same quarter last year, Texas Instruments posted EPS of $1.11 on sales of $3.35 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

The Wall Street consensus estimate for earnings would represent a 20.72% increase for the company. Sales would be have grown 7.46% from the same quarter last year. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020EPS Estimate 1.27 0.86 1 1.01EPS Actual 1.45 1.48 1.24 1.12Revenue Estimate 3.43 B 2.91 B 3.17 B 3.21 BRevenue Actual 3.82 B 3.24 B 3.33 B 3.35 B

Stock Performance

Shares of Texas Instruments were trading at $172.81 as of January 22. Over the last 52-week period, shares are up 36.18%. Given that these returns are generally positive, long-term shareholders can be satisfied 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.