Revenue rose to $6.06 billion and earnings of $2.62 a share beat the $2.44 estimate. The fourth-quarter midpoint of $6.05 billion revenue and $2.62 earnings matches the quarter just reported.
Texas Instruments' third quarter showed how far the analog chip recovery has come. Its forecast shows the company expects it to pause.
Revenue rose 28% from a year earlier and 11% from the second quarter to $6.06 billion. Both of its main segments, analog and embedded processing, grew sequentially and from a year earlier. Operating profit rose 73% to $2.87 billion, and earnings were $2.62 a share, above the $2.44 FMP consensus. Revenue topped the $5.94 billion FMP estimate.
The leverage
The profit growth outpaced revenue by a wide margin. Operating margin was about 47.5%, up from roughly 35% a year earlier, as higher volumes flowed through. That operating leverage is the core of the bull case on the company: when demand returns, profits rise faster than sales.
The forecast
For the fourth quarter, TI guided revenue of $5.80 billion to $6.30 billion and earnings of $2.45 to $2.79 a share. The midpoints, $6.05 billion and $2.62, are essentially identical to the third quarter's results. After an 11% sequential gain, the company is forecasting no growth at the midpoint.
That can be read as caution or as seasonality. The fourth quarter is often softer for industrial and automotive chips, so a flat midpoint may describe a normal pattern rather than a weakening one. It also caps how much more of the recovery shows up in the next report.
The reaction
TI shares closed Wednesday at $284.65, up 2.5%. They were indicated about 1.2% lower in thin early trading Thursday, a smaller decline than the 1.9% drop in Nasdaq 100 futures. TI's results drew a muted response in a session dominated by worries about AI spending.
What to watch
Whether industrial and automotive customers keep ordering into early 2027; how TI's margin holds if revenue flattens.