Texas Instruments Nails Q2 Numbers, But Guidance Short-Circuits Rally

Core Viewpoint - Texas Instruments Inc reported strong second-quarter results, but shares declined due to elevated expectations and uncertainties surrounding tariffs and geopolitical issues [1][6]. Financial Performance - Revenue for the second quarter was $4.45 billion, representing a 9.3% sequential increase and a 16% year-on-year growth, surpassing the consensus estimate of $4.36 billion [2]. - Gross margins expanded to 57.9%, exceeding the consensus of 57.4%, and GAAP earnings were $1.41 per share, above the consensus of $1.36 per share [5]. Market Dynamics - Revenue growth was driven by cyclical recovery trends and demand pull forward in industrial markets and China [3]. - The Auto segment was the only area to experience a sequential decline during the quarter [3]. Guidance and Expectations - Management provided slightly disappointing earnings guidance for the September quarter, with third-quarter sales expected to be around $70-$100 million, lower than anticipated [4][7]. - The guidance reflects an 11% year-on-year growth, while market expectations were for at least 13% [7]. Analyst Ratings and Price Targets - Analysts from JPMorgan, Benchmark, Rosenblatt Securities, and BofA Securities maintained positive ratings, with price targets ranging from $218 to $245 [9].