TI reports 4Q15 and 2015 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 fourth-quarter revenue of $3.19 billion, net income of $836 million and earnings per share of 80 cents. Earnings per share included 9 cents for two items that were not in the company's prior guidance for the quarter.

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 and was in line with our expectations, even though we experienced slowing demand within a sector of the personal electronics market late in the quarter.
  • "Our combined core businesses of Analog and Embedded Processing performed well in the quarter and comprised 87 percent of fourth-quarter revenue.
  • "Gross margin of 58.5 percent, a new record, reflects 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 6 percent from a year ago to $3.7 billion. This represents 28.6 percent of revenue, up from 26.9 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.
  • "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 $3.2 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 115 days.
  • "TI's first-quarter outlook is for revenue in the range of $2.85 billion to $3.09 billion, and earnings per share between 57 and 67 cents. This outlook includes about a $150 million decline in revenue from a year ago within a sector of the personal electronics market. Aside from this, overall expectations for the remainder of our business are about even with the first quarter of 2015.
  • "For 2016, TI's annual effective tax rate is expected to be about 30 percent."

TI also announced its intentions to phase out a small, older manufacturing facility in Greenock, Scotland, over the next three years. Plans are to move production from this facility to more cost-effective 200-millimeter TI fabs in Germany, Japan and Maine.

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. 





$   3,189

$   3,269


Operating profit

$   1,142

$   1,100


Net income

$      836

$      825


Earnings per share

$     0.80

$     0.76



Earnings per share for the fourth quarter of 2015 included a 9-cent benefit for two items not included in the company's prior outlook: 5 cents due to a net tax benefit as a result of the reinstatement of the R&D tax credit and 4 cents for Restructuring charges/other, which included gains on sales of assets and a charge for the planned site closure. 

Cash generation

Amounts are in millions of dollars.

Trailing 12 Months





Cash flow from operations

$   1,430

$   4,268

$  3,892


Capital expenditures

$      164

$      551

$     385


Free cash flow

$   1,266

$   3,717

$  3,507


Free cash flow % of revenue



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