TI reports financial results for 4Q08 and 2008

DALLAS, Jan. 26 /PRNewswire/ -- Conference call on TI web site at 4:30 p.m. Central time today

 

www.ti.com/ir

 

DALLAS, Jan. 26 /PRNewswire-FirstCall/ -- Texas Instruments Incorporated (TI) (NYSE: TXN) today announced fourth-quarter revenue of $2.49 billion, net income of $107 million and earnings per share (EPS) of $0.08.

These financial results include restructuring charges of $0.13 per share. Without the charges, EPS would have been $0.21, considerably better than the company's mid-quarter expectations. (See reconciliation table below.)

TI also announced it is making reductions in employment because demand has continued to weaken with the slowing economy. Employment will be reduced 12 percent through 1800 layoffs and 1600 voluntary retirements and departures. Charges for these employment reductions will be about $300 million. Annualized savings from these reductions, plus those announced in October for the restructuring of the company's Wireless business, will be about $700 million after all reductions are complete in the third quarter of 2009.

"We are realigning our expenses with a global economy that continues to weaken," said Rich Templeton, TI chairman, president and chief executive officer. "By reducing expenses now, we keep TI financially strong and able to invest for future growth.

"Most of the reductions will come in our internal support functions and non-core product lines so that a greater percentage of the dollars we spend will go directly toward developing and supporting Analog and Embedded Processing products. We believe these are the areas that will drive TI's future growth and allow us to achieve our financial objectives.

"We are not counting on a near-term economic rebound for improvement. The actions we are taking to reduce expenses and inventory will position TI to deliver solid financial results, even in a period of prolonged economic weakness. When the economy strengthens, we'll be pleased that we focused aggressively on our core product lines."

4Q08 financial summary

Amounts are in millions of dollars, except per-share amounts. Except as noted, financial results are for continuing operations. The sale of TI's former Sensors & Controls business was completed on April 27, 2006, and that business is reported as a discontinued operation.

 

 

                                 4Q08     4Q07 vs. 4Q07     3Q08 vs. 3Q08



Revenue: $ 2491 $ 3556 -30% $ 3387 -26%
Operating profit: $ 51 $ 996 -95% $ 746 -93%
Income: $ 107 $ 753 -86% $ 563 -81%
Earnings per share: $ 0.08 $ 0.54 -85% $ 0.43 -81%
Cash flow from operations: $ 1113 $ 1425 -22% $ 1046 6%

 

 

TI's revenue declined 30 percent compared with the fourth quarter of 2007 and declined 26 percent compared with the third quarter of 2008. Revenue in all segments declined in both comparisons.

TI's operating profit declined 95 percent compared with the fourth quarter of 2007 and 93 percent compared with the third quarter. The declines were due to lower revenue and the associated lower gross profit in all segments, higher restructuring charges, as well as the impact of underutilized manufacturing assets. These more than offset other manufacturing cost reductions and lower operating expenses.

Excluding restructuring charges of $254 million, TI's operating profit was $305 million in the fourth quarter, or 12.2 percent of revenue. (See reconciliation table below.)

 

4Q08 segment results

 

 

                           4Q08     4Q07  vs. 4Q07    3Q08  vs. 3Q08    Note


Analog:
Revenue $ 1015 $ 1303 -22% $ 1289 -21% (1)
Operating profit $ 78 $ 433 -82% $ 274 -71%
Embedded Processing:
Revenue $ 340 $ 431 -21% $ 427 -20% (2)
Operating
profit (loss) $ (2) $ 103 -102% $ 73 -103%
Wireless:
Revenue $ 646 $ 1123 -42% $ 915 -29% (3)
Operating
profit (loss) $ (87) $ 254 -134% $ 155 -156%
Other:
Revenue $ 490 $ 699 -30% $ 756 -35% (4)
Operating
profit $ 62 $ 206 -70% $ 244 -75%

 

 

The product categories in each segment are as follows:

    --  Analog:  high-performance analog (includes standard power management


products, data converters, amplifiers and interface products),
high-volume analog & logic
-- Embedded Processing: DSPs and microcontrollers used in catalog,
communications infrastructure and automotive applications
-- Wireless: DSPs and analog used in basebands, OMAP(TM) applications
processors and connectivity products for handsets
-- Other: DLP(R) products, calculators, RISC microprocessors, ASIC
products, royalties

 

 

 

    1. The decline in Analog revenue from a year ago and from the prior quarter


was primarily due to high-volume analog & logic. High-performance
analog revenue also declined in both comparisons to a lesser extent.
2. The decline in Embedded Processing revenue from a year ago and from the

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