TI reports 2Q14 financial results and shareholder returns

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

DALLAS, July 21, 2014 — (PRNewswire) —  Texas Instruments Incorporated (TI) (NASDAQ: TXN) today reported second-quarter revenue of $3.29 billion, net income of $683 million and earnings per share of 62 cents

Regarding the company's performance and returns to shareholders, Rich Templeton, TI's chairman, president and CEO, made the following comments:

  • "Revenue for the quarter came in just above the middle of our expected range and earnings were near the top of the range, marking another quarter of solid execution. 
  • "We delivered 8 percent year-over-year revenue growth, or 13 percent when legacy wireless revenue is excluded.  Analog and Embedded Processing comprised 82 percent of second-quarter revenue, 4 points higher than a year ago. 
  • "Gross margin of 57.1 percent, a new record, reflects the quality of our Analog and Embedded Processing portfolio and the efficiency of our manufacturing strategy.  
  • "The strength of our business model is reflected in our generation of cash flow from operations.  Free cash flow for the trailing twelve-month period was up 10 percent from a year ago to $3.2 billion, or 25 percent of revenue.  This is consistent with our target of 20-30 percent. 
  • "We returned $4.2 billion to shareholders in the past twelve months through dividends paid and stock repurchases.  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 $2.8 billion of cash and short-term investments at the end of the quarter, 82 percent of which was owned by the company's U.S. entities.  Inventory days were 111, consistent with our model of 105-115 days.
  • "TI's outlook for the third quarter of 2014 is for revenue in the range of $3.31 billion to $3.59 billion and earnings per share between $0.66 and $0.76.  The annual effective tax rate for 2014 is expected to be about 28 percent, unchanged from our previous guidance."

Revenue excluding legacy wireless and free cash flow are non-GAAP financial measures.  Free cash flow is cash flow from operations less capital expenditures.

Earnings summary

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







2Q14

2Q13

Change


                                                        Revenue

$ 3,292

$ 3,047

8%


                                            Operating profit

$    982

$    906

8%


                                                   Net income

$    683

$    660

3%


                                     Earnings per share

$     .62

$     .58

7%


Cash generation

Amounts are in millions of dollars.








Trailing 12 Months



2Q14


2Q14

2Q13

Change

Cash flow from operations

$     775


$ 3,587

$ 3,323

8%

Capital expenditures

$       80


$    388

$    427

-9%

Free cash flow

$     695


$ 3,199

$ 2,896

10%

Free cash flow % of revenue

21%


25%

24%



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