Dave Savastano10.23.14
Texas Instruments (TI) reported third-quarter revenue of $3.50 billion, net income of $826 million and earnings per share of 76 cents.
“Revenue for the quarter was solidly in the upper half of our expected range and earnings were at the top of the range, marking another quarter of strong progress and execution,” said Rich Templeton, TI’s chairman, president and CEO. “We delivered 8% year-over-year revenue growth. Analog and Embedded Processing comprised 82% of third-quarter revenue. Gross margin of 58.4%, a new record, reflects the quality of our portfolio of Analog and Embedded Processing products as well as the efficiency of our manufacturing strategy.
“Our cash flow from operations once again reflects the strength of our business model,” Templeton added. “Free cash flow for the trailing 12-month period was up 20% from a year ago to $3.5 billion or 27% of revenue. This represents an improvement of 3 percentage points from a year ago and is consistent with our targeted range of 20-30% of revenue.
“We returned $4.2 billion to shareholders in the past 12 months through stock repurchases and dividends paid. In the quarter, we announced a dividend increase of 13%, resulting in an annualized rate of $1.36 per share. Our strategy to return to shareholders all free cash flow not needed for net debt retirement, and to return proceeds from exercises of equity compensation, reflects our confidence in the long-term sustainability of our business model.
“Our balance sheet remains strong, with $3.2 billion of cash and short-term investments at the end of the quarter, 81% of which was owned by the company’s U.S. entities,” he added. “Inventory days were 108, consistent with our model of 105-115 days. TI’s outlook for the fourth quarter of 2014 is for revenue in the range of $3.13 billion to $3.39 billion and earnings per share between $0.64 and $0.74. At the midpoint of our range, revenue would increase 8% from the year-ago quarter. The annual effective tax rate for 2014 is expected to be about 28%, unchanged from our previous guidance.”
“Revenue for the quarter was solidly in the upper half of our expected range and earnings were at the top of the range, marking another quarter of strong progress and execution,” said Rich Templeton, TI’s chairman, president and CEO. “We delivered 8% year-over-year revenue growth. Analog and Embedded Processing comprised 82% of third-quarter revenue. Gross margin of 58.4%, a new record, reflects the quality of our portfolio of Analog and Embedded Processing products as well as the efficiency of our manufacturing strategy.
“Our cash flow from operations once again reflects the strength of our business model,” Templeton added. “Free cash flow for the trailing 12-month period was up 20% from a year ago to $3.5 billion or 27% of revenue. This represents an improvement of 3 percentage points from a year ago and is consistent with our targeted range of 20-30% of revenue.
“We returned $4.2 billion to shareholders in the past 12 months through stock repurchases and dividends paid. In the quarter, we announced a dividend increase of 13%, resulting in an annualized rate of $1.36 per share. Our strategy to return to shareholders all free cash flow not needed for net debt retirement, and to return proceeds from exercises of equity compensation, reflects our confidence in the long-term sustainability of our business model.
“Our balance sheet remains strong, with $3.2 billion of cash and short-term investments at the end of the quarter, 81% of which was owned by the company’s U.S. entities,” he added. “Inventory days were 108, consistent with our model of 105-115 days. TI’s outlook for the fourth quarter of 2014 is for revenue in the range of $3.13 billion to $3.39 billion and earnings per share between $0.64 and $0.74. At the midpoint of our range, revenue would increase 8% from the year-ago quarter. The annual effective tax rate for 2014 is expected to be about 28%, unchanged from our previous guidance.”