Texas Instruments Incorporated (TXN) recently reported its second quarter earnings for 2024, revealing critical financial insights and performance metrics. This article delves into the key insights from the Q2 report, the management discussion and analysis and Stock Target Advisor’s analysis on Texas Instruments.
Key Insights from Texas’s Q2 Reports:
Texas Instruments reported a 16% decline in revenue year-over-year, alongside a 35% drop in net income. Sequentially, however, the company saw a 4% increase in revenue. The industrial and automotive sectors continued to decline, while other markets experienced growth. Operating profit for Q2 stood at $1.25 billion, down from $1.97 billion in the same quarter the previous year. Despite these declines, Texas Instruments maintained robust cash flow from operations, amounting to $6.4 billion over the trailing 12 months, and free cash flow of $1.5 billion for the same period.
- Revenue: $3.82 billion (Q2 2024) vs. $4.53 billion (Q2 2023), a 16% decline.
- Net Income: $1.13 billion (Q2 2024) vs. $1.72 billion (Q2 2023), a 35% decline.
- Earnings per Share: $1.22 (Q2 2024) vs. $1.87 (Q2 2023), a 35% decline.
- Cash Flow from Operations: $1.57 billion for Q2 2024.
- Free Cash Flow: $507 million for Q2 2024, a 53% decline from $1.49 billion in Q2 2023.
Management Discussion and Analysis:
Haviv Ilan, TXN’s president and CEO, highlighted the company’s ongoing investment in research and development (R&D) and capital expenditures. Over the past 12 months, TXN invested $3.7 billion in R&D and selling, general and administrative expenses (SG&A), and $5.0 billion in capital expenditures. The company returned $4.9 billion to shareholders through dividends and stock repurchases.
TXN’s strategic focus remains on strengthening its 300mm production capabilities and maintaining robust cash flow. For Q3 2024, the company projects revenue between $3.94 billion and $4.26 billion, and EPS between $1.24 and $1.48. The anticipated effective tax rate is about 13%.
Stock Target Advisor’s Analysis on Texas Instruments:
According to Stock Target Advisor, Texas Instruments holds an average analyst target price of USD 189.63 over the next 12 months, with a slightly bullish rating based on 10 positive signals and 6 negative signals. The stock’s last closing price was USD 198.29, reflecting a 7.83% increase over the past year.
Conclusion:
Texas Instruments’ Q2 2024 earnings report highlights a company navigating through market challenges with strategic investments and robust cash flow management. Despite a year-over-year decline in revenue and net income, the company’s sequential growth and strong cash flow position underscore its resilience.
Muzzammil is a content writer at Stock Target Advisor. He has been writing stock news and analysis at Stock Target Advisor since 2023 and has worked in the financial domain in various roles since 2020. He has previously worked on an equity research firm that analyzed companies listed on the stock markets in the U.S. and Canada and performed fundamental and qualitative analyses of management strength, business strategy, and product/services forecast as indicated by major brokers covering the stock.
