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Texas Instruments' CEO Resigns on Code of Conduct Violation

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Texas Instruments, Inc. (TXN - Free Report) recently announced that Brian Crutcher has resigned as the company’s chief executive officer (CEO).

The board will not look for any external candidate to take over the position of CEO. Chairman Rich Templeton will reassume as the new CEO of the company. Templeton had served as its CEO from 2004 until Crutcher took over his position on Jun 1.

Crutcher was appointed chief executive officer and president of the company. He worked at Texas Instruments for the past 22 years. Over these years, he climbed to various positions, including executive vice president and chief operating officer.

Reportedly, his resignation was due to violating the company's code of conduct related to personal behavior.

The chipmaker accepted Crutcher’s resignation. Meanwhile, the company said, “The violations are related to personal behavior that is not consistent with our ethics and core values, but not related to company strategy, operations or financial reporting."

The company reported second-quarter revenues of $4.02 billion and earnings of $1.40 a share, beating the consensus estimate of $3.96 billion and $1.31 per share, respectively.

The company is scheduled to report full quarterly results on Jul 24.

Notably, Texas Instruments’ stock has returned 40.9% over the past year, underperforming the 48.1% rally of the industry it belongs to.

To Conclude

Texas Instruments continues to benefit from strong demand in the fast-growing automotive market. The company focuses on infotainment, safety and ADAS, body electronics (including lighting), hybrid electric vehicle and powertrain segments of the automotive market.

The company has made significant progress in the ADAS front, shipping millions of chips to the market. Demand for electronic content in cars is expected to grow in the future and this will support the top line of the company.

Moreover, Texas Instruments’ focus on Internet of Things (IoT) is a big positive. The scope ofIoT is tremendous for semiconductor companies, since it connects every conceivable electronic device. Considerable growth in the embedded business comes from microcontrollers, which are the enabling products. Independent research firms, Gartner and IDC project steady growth in IoT-related spending through 2020.Texas Instruments has been refreshing its product line to benefit from the growing IoT market.

Zacks Rank & Key Picks

Currently, Texas Instruments carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry include Groupon (GRPN - Free Report) , IAC/InterActiveCorp (IAC - Free Report) and Ctrip.com International, Ltd. . While Groupon and IAC/InterActiveCorp sport a Zacks Rank #1 (Strong Buy), Ctrip.com holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Groupon, IAC/InterActiveCorp and Ctrip.com is currently projected to be 6.5%, 7.5% and 16%, respectively.

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