Texas Instruments Incorporated (TXN) — This is one of the world’s largest manufacturers of semiconductors. It also makes scientific calculators and digital light processing products for TVs and video projectors.
On Sept. 21, Texas Instruments increased its quarterly dividend 12% to 38 cents per share and announced an additional share repurchase program worth $7.5 billion. Since then, TXN stock has risen more than 10%.
However, the company is scheduled to report third-quarter earnings today after the close. In its past two quarterly reports, Texas Instruments has delivered EPS at the low end of expectations, and it may very well do so again this time.
Analysts are looking for earnings of 68 cents per share, down 10.5% from a year ago. Revenues are expected to decline 6.2% to $3.28 billion.
After falling from a high at almost $60 in March, TXN stock hit a low under $44 in August, a decline of 28%. But shares rallied from those lows and are challenging their 200-day moving average at $53.18.
A break above it could take TXN stock to the high $50s. But shares could tumble if earnings disappoint. With MACD overbought, volume flat and major resistance a mere three-quarters of a point above Tuesday’s close, those who hold TXN stock may want to sell.
Short sellers should wait until after the earnings announcement before taking a position and place a stop-loss order at $54.50. They may also want to hold off until after the company’s ex-dividend date on Oct. 28 or else they will be liable for paying that dividend to the shareholder.
