Why Texas Instruments (TXN) Stock Is Up in After-Hours Trading Today

NEW YORK (TheStreet) -- Texas Instruments  (TXN) rose in after-market activity on Wednesday after the company reported increases in revenue and net income in its first-quarter earnings.

Net income increased 35% year over year to $487 million from $362 million. Earnings per share increased 38% to 44 cents from 32 cents in the same period one year earlier. Revenue rose 3% year over year to $2.983 billion from $2.885 billion, while operating profit soared 75% to $690 million from $395 million in the same period one year earlier.

For the second quarter, Texas Instruments expects revenue in the range of $3.14 billion to $3.4 billion and earnings per share between 55 cents and 63 cents. The midpoint of the revenue range would represent 7% year-over-year growth.

The stock was up more than 2.25% in after-market activity.

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Separately, TheStreet Ratings team rates TEXAS INSTRUMENTS INC as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate TEXAS INSTRUMENTS INC (TXN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and notable return on equity. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • TXN's revenue growth has slightly outpaced the industry average of 1.5%. Since the same quarter one year prior, revenues slightly increased by 1.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 26.51% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TXN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • TEXAS INSTRUMENTS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TEXAS INSTRUMENTS INC increased its bottom line by earning $1.92 versus $1.50 in the prior year. This year, the market expects an improvement in earnings ($2.09 versus $1.92).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 93.6% when compared to the same quarter one year prior, rising from $264.00 million to $511.00 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, TEXAS INSTRUMENTS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: TXN Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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