Did you analyze how Texas Instruments (TXN) fared in its international operations for the quarter ending March 2025? Given the widespread global presence of this chipmaker, scrutinizing the trends in international revenues becomes imperative to assess its financial strength and future growth possibilities.
In the modern, closely-knit global economic landscape, the capacity of a business to access foreign markets is often a key determinant of its financial well-being and growth path. Investors now place great importance on grasping the extent of a company's dependence on international markets, as it sheds light on the firm's earnings stability, its skill in leveraging various economic cycles and its broad growth potential.
Presence in international markets can act as a hedge against domestic economic downturns and provide access to faster-growing economies. However, this diversification also brings complexities due to currency fluctuations, geopolitical risks and differing market dynamics.
While delving into TXN's performance for the past quarter, we observed some fascinating trends in the revenue from its foreign segments that are commonly modeled and observed by analysts on Wall Street.
The company's total revenue for the quarter amounted to $4.07 billion, showing rise of 11.1%. We will now explore the breakdown of TXN's overseas revenue to assess the impact of its international operations.
A Look into TXN's International Revenue Streams
Europe, Middle East and Africa accounted for 23.00% of the company's total revenue during the quarter, translating to $936 million. Revenues from this region represented a surprise of +6.05%, with Wall Street analysts collectively expecting $882.58 million. When compared to the preceding quarter and the same quarter in the previous year, Europe, Middle East and Africa contributed $786 million (19.62%) and $955 million (26.09%) to the total revenue, respectively.
During the quarter, Japan contributed $275 million in revenue, making up 6.76% of the total revenue. When compared to the consensus estimate of $303.71 million, this meant a surprise of -9.45%. Looking back, Japan contributed $277 million, or 6.91%, in the previous quarter, and $330 million, or 9.01%, in the same quarter of the previous year.
Rest of Asia generated $438 million in revenues for the company in the last quarter, constituting 10.76% of the total. This represented a surprise of +4.26% compared to the $420.1 million projected by Wall Street analysts. Comparatively, in the previous quarter, Rest of Asia accounted for $432 million (10.78%), and in the year-ago quarter, it contributed $401 million (10.95%) to the total revenue.
Of the total revenue, $76 million came from Rest of World during the last fiscal quarter, accounting for 1.87%. This represented a surprise of +16.91% as analysts had expected the region to contribute $65.01 million to the total revenue. In comparison, the region contributed $69 million, or 1.72%, and $64 million, or 1.75%, to total revenue in the previous and year-ago quarters, respectively.
China accounted for 20.30% of the company's total revenue during the quarter, translating to $826 million. Revenues from this region represented a surprise of +10.12%, with Wall Street analysts collectively expecting $750.07 million. When compared to the preceding quarter and the same quarter in the previous year, China contributed $821 million (20.49%) and $623 million (17.02%) to the total revenue, respectively.
Revenue Projections for Overseas Markets
Wall Street analysts expect Texas Instruments to report $4.31 billion in total revenue for the current fiscal quarter, indicating an increase of 12.8% from the year-ago quarter. Europe, Middle East and Africa, Japan, Rest of Asia, Rest of World and China are expected to contribute 20.6% ($889.26 million), 7.1% ($305.63 million), 10.2% ($438.25 million), 1.6% ($67.27 million) and 18.8% ($808.47 million) to the total revenue, respectively.
For the full year, the company is projected to achieve a total revenue of $17.29 billion, which signifies a rise of 10.6% from the last year. The share of this revenue from various regions is expected to be: Europe, Middle East and Africa at 21.3% ($3.67 billion), Japan at 7.4% ($1.27 billion), Rest of Asia at 10.5% ($1.81 billion), Rest of World at 1.6% ($280.13 million) and China at 19.3% ($3.32 billion).
Wrapping Up
Relying on international markets for revenues, Texas Instruments faces both prospects and perils. Thus, tracking the company's international revenue trends is essential for accurately projecting its future trajectory.
With the increasing intricacies of global interdependence and geopolitical strife, Wall Street analysts meticulously observe these patterns, especially for companies with an international footprint, to tweak their forecasts of earnings. Importantly, several additional factors, such as a company's domestic market status, also impact these earnings forecasts.
Here at Zacks, we put a great deal of emphasis on a company's changing earnings outlook, as empirical research has shown that's a powerful force driving a stock's near-term price performance. Quite naturally, the correlation is positive here -- an upward revision in earnings estimates drives the stock price higher.
Boasting a remarkable track record that's been externally verified, the Zacks Rank, our unique stock rating system, leverages changes in earnings projections to function as a reliable gauge for predicting short-term stock price movements.
Texas Instruments currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
A Look at Texas Instruments' Recent Stock Price Performance
The stock has increased by 24% over the past month compared to the 9.1% rise of the Zacks S&P 500 composite. Meanwhile, the Zacks Computer and Technology sector, which includes Texas Instruments, has increased 11.9% during this time frame. Over the past three months, the company's shares have experienced a gain of 2.3% relative to the S&P 500's 3.1% decline. Throughout this period, the sector overall has witnessed a 6.8% decrease.
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