What Happened: Shares of analog chip manufacturer Texas Instruments (NASDAQ:TXN) jumped 7.8% in the pre-market session after the company reported first-quarter results that topped analysts' revenue and EPS expectations, driven by strong performance in its analog segment. Looking ahead, next quarter's revenue guidance was above Wall Street's estimates. On the other hand, its gross margin fell, and its inventory levels increased. Overall, this was a decent quarter for Texas Instruments.
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What is the market telling us: Texas Instruments's shares are not very volatile than the market average and over the last year have had only a move greater than 5%. In context of that, today's move is indicating the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago, when the stock dropped 5.8% on the news that the company reported second quarter results that beat analysts' revenue and EPS expectations.
On the other hand, its underwhelming revenue guidance for the next quarter was disappointing, and its gross margin declined. Additionally, the company burned cash compared to the positive cash inflows reported in previous quarters. Management added that Texas Instruments "experienced weakness across our end markets with the exception of automotive." Overall, this was a mixed quarter for Texas Instruments.
Texas Instruments is up 4.4% since the beginning of the year, and at $176.66 per share it is trading close to its 52-week high of $186.08 from July 2023. Investors who bought $1,000 worth of Texas Instruments's shares 5 years ago would now be looking at an investment worth $1,492.