Texas Instruments Reports 1Q15 Financial Results And Shareholder Returns

DALLAS, April 22, 2015 /PRNewswire/ -- Texas Instruments Incorporated (TI) (NASDAQ: TXN) today reported first-quarter revenue of $3.15 billion, net income of $656 million and earnings per share of 61 cents. 

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

  • "Revenue growth of 6 percent was the sixth consecutive quarter of year-over-year growth and within the range of our expectations. Automotive and industrial markets were strong, as we expected they would be. Revenue, however, was in the bottom half of our range for two reasons. First was weak demand in the last month of the quarter in our personal electronics market, particularly PCs, and in our communications equipment market, particularly wireless infrastructure equipment. Second was a steep decline in the currency exchange rate for the euro relative to the U.S. dollar.
  • "Even so, our core businesses of Analog and Embedded Processing delivered their seventh and tenth consecutive quarters of year-over-year growth, respectively. Combined, Analog and Embedded Processing comprised 86 percent of first-quarter revenue.
  • "Gross margin of 57.7 percent was up almost 4 percentage points from a year ago, reflecting the diversity and longevity of our product portfolio, as well as the efficiency of our manufacturing strategy.
  • "Our cash flow from operations once again underscored the strength of our business model. Free cash flow for the trailing 12 months was up 17 percent from a year ago to $3.6 billion, or 27 percent of revenue. This represents an increase of 2 percentage points from a year ago and is consistent with our targeted range of 20-30 percent of revenue. 
  • "We returned $4.1 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 $3.3 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 124 days.  
  • "TI's outlook for the second quarter is for revenue in the range of $3.12 billion to $3.38 billion and earnings per share between 60 and 70 cents. Our estimates assume continuing weakness in our communications equipment and personal electronics markets, particularly for wireless infrastructure equipment and PCs, respectively. We also do not expect a near-term rebound in foreign currency exchange rates. The annual effective tax rate for 2015 is expected to be about 30 percent."

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. 

   

   1Q15 

  1Q14

Change

Revenue

 

$  3,150

$  2,983

6%

Operating profit

 

$     958

$     690

39%

Net income

 

$     656

$     487

35%

Earnings per share

 

$    0.61

$    0.44

39%

 

Cash generation

Amounts are in millions of dollars.

 

     

Trailing 12 Months

 
   

   1Q15  

    1Q15

     1Q14

Change

Cash flow from operations

 

$  609

$  4,039

$  3,486

16%

Capital expenditures

 

$  123

$     431

$     405

6%

Free cash flow

 

$  486

$  3,608

$  3,081

17%

Free cash flow % of revenue

   

27%

25%

 

 

Capital expenditures for the past 12 months were 3 percent of revenue. Our long-term expectation is about 4 percent.

Cash return

Amounts are in millions of dollars.

     

Trailing 12 Months

 
   

     1Q15

    1Q15

    1Q14

Change

Dividends paid

 

$     356

$  1,354

$  1,268

7%

Stock repurchases

 

$     670

$  2,781

$  2,909

-4%

Total cash returned

 

$  1,026

$  4,135

$  4,177

-1%

 

The company's targeted cash return is 100 percent of free cash flow plus proceeds from exercises of equity compensation minus net debt retirement.

 

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Income

(Millions of dollars, except share and per-share amounts)

   
   

For Three Months Ended

   

March 31,

   

2015

 

2014

Revenue

 

$  3,150

 

$  2,983

Cost of revenue (COR)

 

1,334

 

1,376

Gross profit

 

1,816

 

1,607

Research and development (R&D)

 

338

 

366

Selling, general and administrative (SG&A)

 

439

 

479

Acquisition charges

 

83

 

83

Restructuring charges/other

 

(2)

 

(11)

Operating profit

 

958

 

690

Other income (expense), net (OI&E)

 

4

 

6

Interest and debt expense

 

22

 

25

Income before income taxes

 

940

 

671

Provision for income taxes

 

284

 

184

Net income

 

$     656

 

$     487

         

Diluted earnings per common share

 

$      .61

 

$      .44

         

Average diluted shares outstanding (millions)

 

1,061

 

1,096

         

Cash dividends declared per common share

 

$      .34

 

$      .30

         

As a result of accounting rule ASC 260, which requires a portion of Net income to be
allocated to unvested restricted stock units (RSUs) on which we pay dividend equivalents,
diluted EPS is calculated using the following:

         

Net income

 

$     656

 

$     487

Income allocated to RSUs

 

(9)

 

(7)

Income allocated to common stock for diluted EPS

 

$     647

 

$     480

1 2 3 4
View single page >> |

PR Newswire is a press release distribution company.

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.