What You Need To Know About Texas Instruments

| About: Texas Instruments (TXN)

Texas Instruments Inc. (NYSE:TXN) is set to release FQ4'2013 earnings on Tuesday, January 21.Last year Texas Instruments, or TI, did a great job keeping their shareholders happy. The American semiconductor company well known for its scientific and financial calculators saw company stock rise more than 35% in 2013. Many analysts are expecting TI to outperform the Wall Street consensus again this quarter.


The information below is derived from data submitted to the Estimize.com platform by a set of Buy Side and Independent analyst contributors.image

The current Wall Street consensus expectation is for TI to report 47c EPS and $2.990B revenue while the current Estimize.com consensus from 26 Buy Side and Independent contributing analysts is 48c EPS and $2.995B revenue. TI has met or exceeded the Wall Street profit consensus in each of the past 6 quarters. In 4 of those quarters the aggregate profit consensus from Estimize.com was more accurate than Wall Street.

By tapping into a wider range of contributors including hedge-fund analysts, asset managers, independent research shops, students, and non professional investors Estimize has created a data set that is up to 69.5% more accurate than Wall Street, but more importantly it does a better job of representing the market's actual expectations.

The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. In this case we are seeing a small differential between the groups.image

The distribution of estimates published by analysts on Estimize range from $5.94 to $6.25 EPS and $27.284B to $29.164B in revenues. This quarter we're seeing an average distribution of estimates on profit compared to previous quarters. The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A wider distribution signaling the potential for greater volatility post earnings, a smaller vice versa.image

Over the past 4 months Wall Street has decreased its EPS forecast from 57c to 47c while the Estimize.com consensus has increased from 46c to 48c. Wall Street revenue expectations have dropped from $3.120B to $2.990B while the Estimize consensus has edged higher from $2.990 to $2.996.


The analyst with the highest estimate confidence rating this quarter is danvk who projects 49c and $3.003B in revenue. In the Winter 2014 season, danvk is currently ranked as the 2nd best analyst and is ranked 118th overall among over 3,400 contributing analysts. Estimate confidence ratings are calculated through algorithms developed by deep quantitative research which looks at correlations between analyst track records and tendencies as they relate to future accuracy. In this case the highest rated analyst is expecting TI to beat the Street on both the top and bottom line.

Disclosure: No positions