TI reports 3Q15 financial results and shareholder returns

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

(PRNewswire) —  Texas Instruments Incorporated (TI) (NASDAQ: TXN) today reported third-quarter revenue of $3.43 billion, net income of $798 million and earnings per share of 76 cents.

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

  • "Revenue declined 2 percent from a year ago. While our overall demand remained weak, revenue was stronger than we expected.
  • "Our core businesses of Analog and Embedded Processing each grew year over year. Together, they comprised 85 percent of third-quarter revenue and have delivered nine consecutive quarters of year-over-year growth.
  • "Gross margin was 58.2 percent of revenue, reflecting the quality of our product portfolio, as well as the efficiency of our manufacturing strategy, including the benefit of 300-millimeter analog production.
  • "Our cash flow from operations once again underscored the strength of our business model. Free cash flow for the trailing 12 months was up 4 percent from a year ago to $3.6 billion. This represents 28 percent of revenue, up from 27 percent a year ago, and is consistent with our targeted range of 20-30 percent of revenue.
  • "We have returned $4.2 billion to shareholders in the past 12 months through stock repurchases and dividends. In September, we announced a quarterly dividend increase of 4 cents per share, a 12 percent increase. This marked 12 consecutive years of dividend increases. We also announced a $7.5 billion increase to our share buyback authorization.
  • "Our strategy to return to shareholders 100 percent of free cash flow plus proceeds from exercises of equity compensation minus net debt retirement reflects our confidence in the long-term sustainability of our business model.
  • "Our balance sheet remains strong with $2.7 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 ended the quarter at 111 days.
  • "TI's fourth-quarter outlook is for revenue in the range of $3.07 billion to $3.33 billion, and earnings per share between 64 and 74 cents. For 2015, TI's annual effective tax rate is expected to be about 30 percent, unchanged from previous guidance."

Free cash flow is a non-GAAP financial measure. Free cash flow is cash flow from operations less capital expenditures.

Earnings summary

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



3Q15


3Q14

Change

Revenue


$   3,429


$   3,501

-2%

Operating profit


$   1,164


$   1,175

-1%

Net income


$      798


$      826

-3%

Earnings per share


$     0.76


$     0.76

0%

 

Cash generation

Amounts are in millions of dollars.





Trailing 12 Months





3Q15


3Q15


3Q14


Change

Cash flow from operations


$   1,409


$   4,110


$   3,819


8%

Capital expenditures


$      139


$      512


$      367


40%

Free cash flow


$   1,270


$   3,598


$   3,452


4%

Free cash flow % of revenue




28%


27%




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