Summary

Texas Instruments Inc. is scheduled to announce its second quarter fiscal year 2025 financial results on July 22, 2025.

Analysts believe the company maintains a competitive advantage in the industrial automation and automotive chip sectors. The sustained growth momentum demonstrated by its analog business over the past quarter is expected to pave the way for revenue expansion in the next quarter.

For this key fiscal quarter, both management's perspective on performance and views from sell-side analysts indicate the company is actively responding to the evolving macro environment and long-cycle technology demand changes, ranging from product mix to supply chain integration.

Market Forecast

The market generally expects Q2 revenue to be approximately $4.34 billion, with net profit forecasted at $1.24 billion. Adjusted earnings per share (EPS) are expected to reach $1.41, providing greater scope for optimism regarding its continuously improving profitability.

The company's main analog chip segment has recently demonstrated progress in automotive electronics and industrial applications, positioning it to contribute more incremental gains to overall revenue. Analog chip revenue grew approximately 13% year-over-year last quarter, solidifying its position as the company's most significant business segment.

Previous Quarter Review

For the first quarter, the company achieved revenue of approximately $4.07 billion, representing a year-over-year increase of about 11%. Gross margin approached 58%. Net profit was approximately $1.18 billion, with net margin maintained around 29%. Adjusted EPS climbed to $1.28 from $1.20 in the same period the previous year. The quarter overall demonstrated solid growth, highlighted by strong analog chip sales. The analog chip segment and related solutions also solidified their strategic focus in areas like industrial automation and automotive electronics, further strengthening the business's competitive moat.

Current Quarter Outlook

Supply Chain Resilience and Capacity Deployment

To maintain resilience against unforeseen demand fluctuations and geopolitical uncertainties, the company has adopted a more flexible manufacturing model on some production lines. Capacity can be shifted or allocated between several overseas OSATs (Outsourced Semiconductor Assembly and Test providers) and domestic factories based on order trends and tariff environments. Production schedules can also be rapidly adjusted during periods of high demand.

Amid global trade environment fluctuations, the company is increasing manufacturing investment within the US to mitigate potential tariff pressures on one hand, while maintaining solid cooperative relationships with overseas wafer fabs and OSATs on the other, balancing manufacturing costs with delivery efficiency. Based on information from the previous quarter's conference call, when demand in specific areas exceeds expectations, the company has the capability to scale capacity utilization at particular plants relatively quickly, while ensuring raw material and equipment reserves remain at relatively secure levels.

Analyst Views

Specialized institutions hold mixed, mostly neutral to positive, assessments of Texas Instruments' performance this quarter.

Several institutions, including Citigroup and TD Cowen, hold a favorable outlook on Texas Instruments. Citigroup analyst Christopher Danely maintained a "Buy" rating and raised the target price from $220 to $260. Analysts generally believe the company's competitive edge in the analog chip space, coupled with ongoing optimization of capacity and production technology, positions it well for sustained future growth.

Some institutions are also optimistic about the company's continued penetration into the automotive and industrial markets. They believe that if the demand for automotive feature upgrades continues to grow, the analog chip sector may generate additional earnings elasticity.

Overall, disagreements center around concerns over short-term inventory adjustment cycles and the global trade environment. However, most analysts still affirm the company's position in the analog chip market and its R&D reserves.