TI reports financial results for 3Q11

Conference call on TI website at 4:30 p.m. Central time today

(PRNewswire) — Texas Instruments Incorporated (TI) (NYSE: TXN) today announced third-quarter revenue of $3.47 billion, net income of $601 million and earnings per share of 51 cents.  EPS includes 9 cents in charges associated with the company's acquisition of National Semiconductor.

"The highlight of the third quarter was the completion of the purchase of National Semiconductor.  We welcome the people of National to TI, and together we're already taking our combined portfolio of almost 45,000 Analog products to customers all over the world," said Rich Templeton, chairman, president and chief executive officer.

"Our revenue for the third quarter was higher than we expected though, overall, the quarter was below the seasonal average.  We expect the same in the fourth quarter as economic uncertainty continues to weigh on demand in almost every major market segment in which we operate.  We are well prepared to continue to gain share in our core businesses, no matter the economic conditions."

3Q11 financial summary

Amounts are in millions of dollars, except per-share amounts.  



3Q11


3Q10

vs. 3Q10


2Q11

vs. 2Q11

Revenue

$  3,466


$   3,740

-7%


$  3,458

0%

Operating profit

$     814


$   1,227

-34%


$     905

-10%

Net income

$     601


$      859

-30%


$     672

-11%

Earnings per share

$      .51


$       .71

-28%


$      .56

-9%

Cash flow from operations

$  1,140


$   1,318

-14%


$     629

81%




TI closed its acquisition of National Semiconductor on September 23, 2011, and from that date began to consolidate the results of the acquired operations into TI's Analog segment under the name Silicon Valley Analog.  Silicon Valley Analog revenue for that limited time was $18 million and operating profit was $2 million.  

Acquisition-related charges of $154 million are included in the Other segment's results.  As required by the acquisition method of accounting for business combinations, these charges include $7 million in cost of revenue attributable to the fair value write-up of acquired inventory that was sold after the date of acquisition.  The remainder, $147 million, includes restructuring costs, transaction costs, retention bonuses and amortization of intangibles.  In addition, there was a $10 million discrete tax charge.

TI's third-quarter 2011 gross profit and operating profit were negatively impacted by costs associated with lower levels of factory utilization in the quarter as the company lowered production in response to weaker demand, as well as charges for inventory obsolescence on certain custom programs.  These were partially offset by a net benefit resulting from proceeds from ongoing insurance claims associated with the March earthquake in Japan.  

Operating profit declined from a year ago primarily due to lower gross profit, as well as acquisition costs.  Compared with the prior quarter, operating profit was lower due to acquisition costs, which were partially offset by lower operating expenses.  

3Q11 segment results



3Q11


3Q10

vs. 3Q10


2Q11

vs. 2Q11


Analog:









        Revenue

$  1,557


$  1,581

-2%


$ 1,588

-2%


        Operating profit

$     414


$     520

-20%


$    446

-7%


Embedded Processing:









        Revenue

$     539


$     579

-7%


$    596

-10%


        Operating profit

$     113


$     160

-29%


$    141

-20%


Wireless:









        Revenue

$     580


$     767

-24%


$    558

4%


        Operating profit

$       78


$     180

-57%


$      82

-5%


Other*:









        Revenue

$     790


$     813

-3%


$    716

10%


        Operating profit

$     209


$     367

-43%


$    236

-11%














*  Includes total acquisition-related costs of $154 million in the third quarter of 2011 and $13 million in the second quarter of 2011.  Also includes a net benefit from ongoing insurance claims associated with the earthquake in Japan of $23 million in the third quarter of 2011 and a net cost of $50 million in the second quarter of 2011.  




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