Texas Instruments (TXN) Up 7.8% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Texas Instruments reported strong second-quarter 2025 results, beating earnings and revenue estimates, which has led to a positive trend in its stock performance, outperforming the S&P 500 by 7.8% in the past month [1][2]. Financial Performance - The company reported Q2 earnings per share of $1.41, exceeding the Zacks Consensus Estimate by 6.82% and reflecting a year-over-year increase of 15.6% [3]. - Revenues for the second quarter reached $4.45 billion, surpassing the Zacks Consensus Estimate by 3.23% and increasing 16% year over year [4]. Segment Performance - Texas Instruments operates in three segments: - Analog: Generated revenues of $3.45 billion (77.6% of total revenues), up 18% year over year [5]. - Embedded Processing: Revenues amounted to $679 million (15.3% of total revenues), reflecting a 10.4% increase year over year [5]. - Other: Revenues totaled $317 million (7.1% of total revenues), up 13.6% from the prior year [6]. Operating Metrics - Gross profit increased 16% year over year to $2.58 billion, with a gross margin of 58% remaining flat [7]. - Operating profit rose 25.2% year over year to $1.56 billion, with an operating margin of 35.1%, expanding 250 basis points from the previous year [8]. Balance Sheet and Cash Flow - As of June 30, 2025, cash and short-term investments were $5.36 billion, up from $5 billion at the end of Q1 2025 [9]. - Long-term debt increased to $14.04 billion from $12.85 billion in the previous quarter [9]. - Operating cash flow for Q2 was approximately $1.86 billion, with $302 million spent on stock repurchases and $1.24 billion on dividends [10]. Guidance and Outlook - For Q3 2025, Texas Instruments expects revenues between $4.45 billion and $4.80 billion, with earnings per share projected between $1.36 and $1.60 [11]. - There has been an upward trend in estimates since the earnings release, indicating positive sentiment among investors [12][14].