Texas Instruments earnings exceeded analyst expectations in the third quarter of 2026, with revenue rising about 28% to $6.06 billion and GAAP earnings reaching $2.62 per share. Shares gained 7% in after-hours trading following the October 21 announcement, as the chipmaker forecast fourth-quarter revenue of $5.80 billion to $6.30 billion.
Key Takeaways
- Third-quarter earnings exceeded estimates by $0.19 per share, while revenue beat forecasts by $130 million.
- Industrial, automotive and data center demand supported growth, with Analog leading the major chip businesses.
- Fourth-quarter revenue guidance spans outcomes slightly below and above the third-quarter result.
Table of Contents
- Texas Instruments earnings grow faster than revenue
- Analog leads growth across core chip businesses
- Cash generation rises as capital spending falls
- Fourth-quarter guidance points to broadly steady sales
- Conclusion
Texas Instruments earnings grow faster than revenue
For the quarter ended September 30, revenue increased to $6.055 billion from $4.742 billion a year earlier. Diluted earnings per share rose 77% from $1.48, while net income increased 78% to $2.425 billion.
The company’s third-quarter 2026 financial results announcement showed operating profit rising 73% to $2.874 billion. That outpaced revenue growth, lifting operating margin to approximately 47.5% from 35.1%, calculated from the reported figures.
Reported earnings included a one-cent-per-share reduction that was not in the company’s original guidance. The $2.62 earnings figure is a GAAP result, rather than an adjusted measure.
| Item | Details |
|---|---|
| Analog | Q3 2026 revenue of $4.911 billion, up 32%; operating profit of $2.505 billion, up 69%. |
| Embedded Processing | Q3 2026 revenue of $858 million, up 21%; operating profit of $227 million, up 110%. |
| Other | Q3 2026 revenue of $286 million, down 6%; operating profit of $142 million, up 106%. |
Analog leads growth across core chip businesses
Chairman, President and Chief Executive Haviv Ilan said revenue increased 11% from the preceding quarter, with continued broad growth in industrial, automotive and data center markets.
Analog, the larger of TI’s two main chip businesses, grew faster than Embedded Processing. Both segments also recorded operating-profit growth above their respective revenue growth rates. The smaller Other segment reported lower sales.
Cash generation rises as capital spending falls
Operating cash flow reached $9.896 billion for the trailing 12 months, up 43% from a year earlier. Capital expenditures fell to $2.578 billion from $4.817 billion over the same period.
TI reported trailing-12-month free cash flow of $8.422 billion, compared with $2.415 billion a year earlier. This non-GAAP measure subtracts capital spending from operating cash flow and adds proceeds from U.S. CHIPS Act incentives, which totaled $1.104 billion in the latest period.
Cash returned to shareholders totaled $5.810 billion, down 11%. Dividends increased 5% to $5.174 billion, but share repurchases fell 61% to $636 million. The decline in total returns therefore reflected lower buybacks rather than lower aggregate dividend payments.
Fourth-quarter guidance points to broadly steady sales
Management forecast fourth-quarter earnings of $2.45 to $2.79 per share alongside its $5.80 billion to $6.30 billion revenue range. These figures are guidance, not completed results.
The revenue range has a midpoint of $6.05 billion, close to the third quarter’s $6.055 billion. The outlook therefore allows for either a modest sequential decline or further growth, rather than signaling another increase comparable to the third quarter’s 11% advance.
Conclusion
Texas Instruments paired stronger third-quarter profitability with higher cash generation. Its fourth-quarter results will show where sales land within management’s $5.80 billion to $6.30 billion range and whether growth across industrial, automotive and data center markets continues.
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