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TI reports financial results for 3Q09 Conference call on TI web site at 4:30 p.m. Central time today Non-GAAP Reconciliation Charts DALLAS, Oct 19, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- Texas Instruments Incorporated (TI) (NYSE: TXN) today announced third-quarter revenue of $2.88 billion, net income of $538 million and earnings per share (EPS) of $0.42. "Our performance in the quarter exceeded our expectations and was led by a second consecutive quarter of 20-percent growth in Analog," said Rich Templeton, TI chairman, president and CEO. "We are encouraged with the strong sequential increase in demand for our products over the past two quarters as our customers are winding down their inventory corrections and have begun to increase production levels in their factories. This revenue growth, combined with our early actions to pare costs so that we would not be dependent upon an uncertain rebound in the overall economy, has resulted in solid improvements in our profitability. "Our balance sheet is strong and has allowed us to opportunistically make investments in Analog and Embedded Processing throughout this downturn that should provide returns for years to come. For example, we are increasing our investments in manufacturing capacity to support higher levels of growth, including start-up of the world's first facility to produce analog chips on 300-millimeter wafers. Applying advanced manufacturing technology to analog at an attractive cost will give TI an opportunity to accelerate our strategy and extend our leadership. "Although we still have much work to do, our progress has been good." 3Q09 financial summary
----------------------
Amounts are in millions of dollars, except per-share amounts.
3Q09 3Q08 vs. 3Q08 2Q09 vs. 2Q09
---- ---- -------- ---- --------
Revenue: $2880 $3387 -15% $2457 17%
Operating profit: $ 763 $ 746 2% $ 343 122%
Net income: $ 538 $ 563 -4% $ 260 107%
Earnings per share: $0.42 $0.43 -2% $0.20 110%
Cash flow from operations: $ 834 $1046 -20% $ 557 50%
TI's revenue declined 15 percent compared with the third quarter of 2008 and increased 17 percent compared with the second quarter of 2009. The decline from a year ago was the result of declines across all segments, particularly the Wireless segment. The increase from the prior quarter was due to growth in all segments, particularly the Analog segment. Despite revenue that was $507 million lower compared with the year-ago quarter, TI's operating profit grew $17 million primarily due to lower operating expenses, as well as lower manufacturing costs. Operating profit increased $420 million compared with the second quarter primarily due to higher revenue and the associated gross profit. Operating profit increased from the prior quarter in all segments. 3Q09 segment results
--------------------
3Q09 3Q08 vs. 3Q08 2Q09 vs. 2Q09 Note
---- ---- -------- ---- -------- ----
Analog:
Revenue $1184 $1289 -8% $983 20% (1)
Operating profit $ 306 $ 274 12% $ 96 219%
Embedded Processing:
Revenue $ 393 $ 427 -8% $350 12% (2)
Operating profit $ 75 $ 73 3% $ 28 168%
Wireless:
Revenue $ 675 $ 915 -26% $601 12% (3)
Operating profit $ 110 $ 155 -29% $ 58 90%
Other:
Revenue $ 628 $ 756 -17% $523 20% (4)
Operating profit $ 272 $ 244 11% $161 69%
The product categories in each segment are as follows:
-- Analog: high-volume analog & logic, high-performance analog (includes
data converters, amplifiers and interface products) and power
management
-- Embedded Processing: DSPs and microcontrollers used in catalog,
communications infrastructure and automotive applications
-- Wireless: DSPs and analog used in basebands for handsets, OMAP(TM)
applications processors and connectivity products for wireless
applications
-- Other: includes DLP(R) products, calculators, ASIC products, RISC
microprocessors and royalties
(1) The decline in Analog revenue from a year ago was due to lower high-
volume analog & logic and high-performance analog revenue. Power
management revenue increased slightly. The increase in Analog
revenue from the prior quarter was due to growth in all three product
categories.
(2) The decline in Embedded Processing revenue from a year ago was due to
lower revenue from catalog, communications infrastructure and
automotive products. The increase in Embedded Processing revenue
from the prior quarter was primarily due to higher catalog product
revenue, while automotive product revenue grew by a lesser amount and
communications infrastructure product revenue was even.
(3) Wireless revenue declined from a year ago due to lower baseband
revenue. Revenue from OMAP applications processors also declined,
although by a lesser amount, while revenue from connectivity products
increased. Wireless revenue increased from the prior quarter
primarily due to higher revenue from baseband products, and by a
lesser amount, increased revenue from connectivity products and OMAP
applications processors.
(4) Other revenue decreased from a year ago due to declines in RISC
microprocessors, DLP products, ASIC products, royalties and
calculators. Other revenue increased from the prior quarter due to a
seasonal increase in calculators, as well as higher revenue from DLP
products, royalties and ASIC products. Revenue from RISC
microprocessors declined from the prior quarter.
From a year ago, operating profit increased in the Analog segment primarily due to operating expense reductions, as well as higher gross profit. Operating profit in the Embedded Processing and Other segments increased due to operating expense reductions. Operating profit in the Wireless segment declined due to lower gross profit, which was partially offset by lower operating expenses. Compared with the prior quarter, operating profit increased in the Analog, Embedded Processing and Other segments due to higher gross profit. Operating profit increased in the Wireless segment primarily due to the combination of higher gross profit and lower restructuring charges. Restructuring charges were as follows:
3Q09 3Q08 2Q09
---- ---- ----
Analog: $ 4 $-- $35
Embedded Processing: $ 2 $-- $18
Wireless: $ 3 $-- $23
Other: $ 1 $-- $ 9
Total: $10 $-- $85
3Q09 additional financial information -- Orders were $3.11 billion, down 4 percent from a year ago but up 11
percent from the prior quarter.
-- Inventory was $1.12 billion, down $459 million from a year ago and up
$53 million from the prior quarter.
-- Capital expenditures were $226 million in the quarter, an increase from
$197 million in the year-ago quarter and an increase from $47 million in
the prior quarter.
-- TI used $251 million in the quarter to repurchase 10.5 million shares of
its common stock and paid dividends of $138 million.
-- Cash and cash equivalents plus short-term investments increased to $2.83
billion at the end of the quarter.
Outlook For the fourth quarter of 2009, TI expects: -- Revenue: $2.78 - 3.02 billion
-- Earnings per share: $0.42 - 0.50
The EPS estimate includes a negative impact of $0.01 per share resulting from restructuring charges. TI will update its fourth-quarter outlook on December 8, 2009. For the full year of 2009, TI expects approximately the following: -- R&D expense: $1.5 billion
-- Capital expenditures: $800 million, up from the prior expectation of
$300 million
-- Depreciation: $900 million
-- Annual effective tax rate: 28%, up from the prior expectation of 27%
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Income
(Millions of dollars, except share and per-share amounts)
For Three Months Ended
----------------------
Sept. 30, Sept. 30, June 30,
2009 2008 2009
----- ----- -----
Revenue $2,880 $3,387 $2,457
Cost of revenue 1,399 1,744 1,333
----- ----- -----
Gross profit 1,481 1,643 1,124
Research and development (R&D) 368 507 369
Selling, general and administrative (SG&A) 340 390 327
Restructuring expense 10 -- 85
----- ----- -----
Operating profit 763 746 343
Other income (expense) net 2 10 13
----- ----- -----
Income before income taxes 765 756 356
Provision for income taxes 227 193 96
----- ----- -----
Net income $ 538 $ 563 $ 260
===== ===== =====
Earnings per common share:
Basic $ .42 $ .43 $ .20
===== ===== =====
Diluted $ .42 $ .43 $ .20
===== ===== =====
Average shares outstanding (millions):
Basic 1,255 1,304 1,267
===== ===== =====
Diluted 1,268 1,315 1,272
===== ===== =====
Cash dividends declared per share of common
stock $ .11 $ .10 $ .11
===== ===== =====
Percentage of revenue:
Gross profit 51.4% 48.5% 45.7%
R&D 12.7% 15.0% 15.0%
SG&A 11.8% 11.5% 13.3%
Operating profit 26.5% 22.0% 14.0%
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheets
(Millions of dollars, except share amounts)
Sept. 30, Sept. 30, June 30,
2009 2008 2009
----- ----- -----
Assets
Current assets:
Cash and cash equivalents $ 1,294 $ 1,715 $ 1,765
Short-term investments 1,533 278 792
Accounts receivable, net of allowances
of ($22), ($28) and ($23) 1,435 1,774 1,244
Raw materials 89 103 81
Work in process 767 982 699
Finished goods 260 490 283
----- ----- -----
Inventories 1,116 1,575 1,063
----- ----- -----
Deferred income taxes 592 679 668
Prepaid expenses and other current
assets 168 191 208
----- ----- -----
Total current assets 6,138 6,212 5,740
----- ----- -----
Property, plant and equipment at cost 6,599 7,499 6,739
Less accumulated depreciation (3,654) (3,982) (3,799)
----- ----- -----
Property, plant and equipment, net 2,945 3,517 2,940
----- ----- -----
Long-term investments 627 717 632
Goodwill 926 840 926
Acquisition-related intangibles 138 99 150
Deferred income taxes 928 688 909
Capitalized software licenses, net 124 202 140
Overfunded retirement plans 20 137 20
Other assets 57 54 53
----- ----- -----
Total assets $11,903 $12,466 $11,510
======= ======= =======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 467 $ 601 $ 421
Accrued expenses and other liabilities 959 976 931
Income taxes payable 148 35 56
Accrued profit sharing and retirement 88 126 60
----- ----- -----
Total current liabilities 1,662 1,738 1,468
----- ----- -----
Underfunded retirement plans 464 186 502
Deferred income taxes 60 52 54
Deferred credits and other liabilities 279 396 273
----- ----- -----
Total liabilities 2,465 2,372 2,297
----- ----- -----
Stockholders' equity:
Preferred stock, $25 par value.
Authorized -- 10,000,000 shares.
Participating cumulative preferred.
None issued. -- -- --
Common stock, $1 par value.
Authorized -- 2,400,000,000 shares.
Shares issued: Sept. 30, 2009 --
1,739,770,537; Sept. 30, 2008 --
1,739,717,573; June 30, 2009 --
1,739,734,081 1,740 1,740 1,740
Paid-in capital 1,071 973 1,045
Retained earnings 21,562 21,204 21,163
Less treasury common stock at cost:
Shares: Sept. 30, 2009 -- 486,897,139;
Sept. 30, 2008 -- 443,292,628; June 30,
2009 -- 478,309,646 (14,257) (13,481) (14,061)
Accumulated other comprehensive income
(loss), net of taxes (678) (342) (674)
----- ----- -----
Total stockholders' equity 9,438 10,094 9,213
----- ------ -----
Total liabilities and stockholders'
equity $11,903 $12,466 $11,510
======= ======= =======
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Millions of dollars)
For Three Months Ended
----------------------
Sept. 30, Sept. 30, June 30,
2009 2008 2009
---- ---- ----
Cash flows from operating activities:
Net income $ 538 $ 563 $ 260
Adjustments to net income:
Depreciation 217 252 221
Stock-based compensation 46 53 47
Amortization of acquisition-related
intangibles 12 9 12
Deferred income taxes 71 (78) 6
Increase (decrease) from changes in:
Accounts receivable (186) 36 (116)
Inventories (53) 76 37
Prepaid expenses and other current assets 31 50 (15)
Accounts payable and accrued expenses 54 (24) 101
Income taxes payable 94 41 (52)
Accrued profit sharing and retirement 28 25 26
Other (18) 43 30
---- ---- ----
Net cash provided by operating activities 834 1,046 557
---- ----- ----
Cash flows from investing activities:
Additions to property, plant and equipment (226) (197) (47)
Purchases of short-term investments (879) -- (343)
Sales and maturities of short-term
investments 139 49 544
Purchases of long-term investments -- (3) (3)
Redemptions and sales of long-term
investments 16 32 43
Acquisitions, net of cash acquired -- -- (51)
----- ----- -----
Net cash (used in) provided by investing
activities (950) (119) 143
----- ----- -----
Cash flows from financing activities:
Dividends paid (138) (131) (139)
Sales and other common stock transactions 34 30 19
Excess tax benefit from share-based
payments -- 1 --
Stock repurchases (251) (429) (251)
----- ----- -----
Net cash used in financing activities (355) (529) (371)
----- ----- -----
Net (decrease) increase in cash and cash
equivalents (471) 398 329
Cash and cash equivalents, beginning of
period 1,765 1,317 1,436
----- ----- -----
Cash and cash equivalents, end of period $1,294 $1,715 $1,765
====== ====== ======
Certain amounts in prior periods' financial statements have been
reclassified to conform to the current presentation.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as TI or its management "believes," "expects," "anticipates," "foresees," "forecasts," "estimates" or other words or phrases of similar import. Similarly, statements herein that describe the Company's business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements. We urge you to carefully consider the following important factors that could cause actual results to differ materially from the expectations of TI or its management: -- Market demand for semiconductors, particularly in key markets such as
communications, entertainment electronics and computing;
-- TI's ability to maintain or improve profit margins, including its
ability to utilize its manufacturing facilities at sufficient levels to
cover its fixed operating costs, in an intensely competitive and
cyclical industry;
-- TI's ability to develop, manufacture and market innovative products in a
rapidly changing technological environment;
-- TI's ability to compete in products and prices in an intensely
competitive industry;
-- TI's ability to maintain and enforce a strong intellectual property
portfolio and obtain needed licenses from third parties;
-- Expiration of license agreements between TI and its patent licensees,
and market conditions reducing royalty payments to TI;
-- Economic, social and political conditions in the countries in which TI,
its customers or its suppliers operate, including security risks, health
conditions, possible disruptions in transportation networks and
fluctuations in foreign currency exchange rates;
-- Natural events such as severe weather and earthquakes in the locations
in which TI, its customers or its suppliers operate;
-- Availability and cost of raw materials, utilities, manufacturing
equipment, third-party manufacturing services and manufacturing
technology;
-- Changes in the tax rate applicable to TI as the result of changes in tax
law, the jurisdictions in which profits are determined to be earned and
taxed, the outcome of tax audits and the ability to realize deferred tax
assets;
-- Losses or curtailments of purchases from key customers and the timing
and amount of distributor and other customer inventory adjustments;
-- Customer demand that differs from our forecasts;
-- The financial impact of inadequate or excess TI inventory that results
from demand that differs from projections;
-- The ability of TI and its customers and suppliers to access their bank
accounts and lines of credit or otherwise access the capital markets;
-- Product liability or warranty claims, claims based on epidemic or
delivery failure or recalls by TI customers for a product containing a
TI part;
-- TI's ability to recruit and retain skilled personnel; and
-- Timely implementation of new manufacturing technologies, installation of
manufacturing equipment and the ability to obtain needed third-party
foundry and assembly/test subcontract services.
For a more detailed discussion of these factors, see the Risk Factors discussion in Item 1A of the Company's most recent Form 10-K. The forward-looking statements included in this release are made only as of the date of this release, and the Company undertakes no obligation to update the forward-looking statements to reflect subsequent events or circumstances. About Texas Instruments Texas Instruments (NYSE: TXN) helps customers solve problems and develop new electronics that make the world smarter, healthier, safer, greener and more fun. A global semiconductor company, TI innovates through design, sales and manufacturing operations in more than 30 countries. For more information, go to www.ti.com. TI trademarks: OMAP DLP Other trademarks are the property of their respective owners. TXN-F SOURCE Texas Instruments Incorporated http://www.ti.com Copyright © 2009 PR Newswire. All rights reserved |
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