Texas Instruments Inc (NASDAQ:TXN) stock rallies 7.79% (As on January 28, 11:34:59 AM UTC-4, Source: Google Finance) after the company guided for first-quarter earnings and revenue above Wall Street’s expectations today. The forecast signals reinvigorated demand for its analog processors following a prolonged market slump, and its sent its stock higher in late trading. The forecast was so positive that investors were willing to overlook disappointing fourth-quarter results, with the chipmaker missing estimates on both major metrics. Analog revenue grew 14% year-over-year. Embedded Processing grew 8%, and the Other segment declined from the year-ago quarter. Operating profit was $1.5 billion in the quarter, or 33% of revenue, and was up 7% from the year-ago quarter. Net income in the fourth quarter was $1.2 billion.
Moreover, during the quarter, the industrial market was up high teens year-over-year, with recovery continuing broadly across sectors and was down mid-single digits sequentially. The automotive market increased upper single digits year-over-year and was down low single digits sequentially. Data center grew around 70% year-over-year and mid-single digits sequentially. Personal electronics declined upper teens year-over-year and mid-teens sequentially. Lastly, communications equipment declined low single digits year-over-year and mid-teens sequentially.
TXN in the fourth quarter of FY25 has reported the adjusted earnings per share of $1.27, missing the analysts’ estimates for the adjusted earnings per share of $1.29. The company had reported the adjusted revenue growth of 10 percent to $4.42 billion in the fourth quarter of FY25, missing the analysts’ estimates for revenue of $4.44 billion. It declined 7% sequentially.
Additionally, Cash flow from operations was $2.3 billion in the quarter. Capital expenditures were $925 million in the quarter. The balance sheet remained strong with $4.9 billion of cash and short-term investments at the end of the fourth quarter. Total debt outstanding was $14 billion with a weighted average coupon of 4%. Inventory at the end of the quarter was $4.8 billion, down $25 million from the prior quarter, and days were 222, up seven days sequentially. In 2025, the company received a $670 million cash benefit related to CHIPS Act incentives.
The company is forecasting earnings for the current quarter of between $1.22 and $1.48 per share, with the midpoint of that range well ahead of the Street’s consensus estimate of $1.26. It’s also looking for sales of between $4.32 billion and $4.68 billion versus the Street’s guidance of $4.42 billion.