Texas Instruments Incorporated (NASDAQ:TXN) stock rose 4.55% (As on Jan 26, 11:24:14 AM UTC-4, Source: Google Finance) after the company forecast current-quarter revenue above expectations and said it would sharpen its focus on chips used in the lucrative automotive and industrial sectors. The company’s earnings totaled $2.14 billion compared with $1.69 billion, in last year’s fourth quarter. The company, which also beat fourth-quarter revenue estimates, is boosting capacity as chipmakers try to plug the gap between demand and supply caused by the pandemic-fueled supply delays and a shift to working and learning from home. Texas Instruments now plans to bank on opportunities and place “additional strategic emphasis” on the industrial and automotive segments, which roughly account for 41% and 21% of the company’s annual revenue. Customers in these two segments are turning to analog and embedded technology to make their end-products smarter and more efficient, which will drive faster growth in chip demand to these segments

The company in the fourth quarter of FY 21has reported the adjusted earnings per share of $2.27, beating the analysts’ estimates for the adjusted earnings per share of $1.94. The company had reported the adjusted revenue growth of 18.4 percent to $4.83 billion in the fourth quarter of FY 21, beating the analysts’ estimates for revenue of $4.43 billion, according Refinitiv estimate. The revenue growth is driven by strong demand in industrial and automotive markets. Analog revenue grew 20% and Embedded Processing grew 6% from the year-ago quarter.

Texas Instruments forecast first-quarter revenue between $4.5 billion and $4.9 billion, compared to analysts’ expectations of $4.37 billion, according to IBES data from Refinitiv. The company in November had announced plans to set up 300 millimeter wafer fabrication plants in Sherman, Texas, which will complement its two other units in the city and a third it bought in Utah.

Additionally, the cash flow from operations of $8.8 billion for the year again underscored the strength of the business model. Free cash flow for the year was $6.3 billion and 34% of revenue. This reflects the quality of the product portfolio, as well as the efficiency of our manufacturing strategy, including the benefit of 300-millimeter production. The company has returned $4.4 billion to owners in 2021 through dividends and stock repurchases. TXN has declared a quarterly cash dividend of $1.15 per share of common stock, payable Feb. 7, 2022, to stockholders of record on Jan. 31, 2022.