UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE
OF REPORT (DATE OF EARLIEST EVENT REPORTED): October 22,
2007
TEXAS
INSTRUMENTS INCORPORATED
(Exact
name of registrant as specified in charter)
|
DELAWARE
|
|
001-03761
|
|
75-0289970
|
|
(State
or other jurisdiction of incorporation)
|
|
(Commission
file number)
|
|
(I.R.S.
employer identification
no.)
|
12500
TI BOULEVARD
P.O.
BOX 660199
DALLAS,
TEXAS 75266-0199
(Address
of principal executive offices)
Registrant’s
telephone number, including area code: (972) 995-3773
Check
the
appropriate box below if the Form 8-K is intended to simultaneously satisfy
the
filing obligation of the registrant under any of the following
provisions:
|
¨
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
¨
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
¨
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
|
¨
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
|
ITEM
2.02. Results of Operations and Financial Condition
The
Registrant's news release dated October 22, 2007, regarding its third quarter
2007 results of operations and financial condition attached hereto as Exhibit
99
is incorporated by reference herein.
|
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ITEM
9.01. Exhibits
|
|
Designation
of
Exhibit
in
this
Report
|
|
Description
of Exhibit
|
|
99
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|
Registrant’s
News Release
|
|
|
|
Dated
October 22, 2007 (furnished pursuant to Item
2.02)
|
“Safe
Harbor” Statement under the Private Securities Litigation Reform Act of 1995:
This report 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 in this report 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 the Company or
its
management:
|
·
|
Market
demand for semiconductors, particularly for analog chips and digital
signal processors 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 company
forecasts;
|
|
·
|
The
financial impact of inadequate or excess TI inventories to meet demand
that differs from projections;
|
|
·
|
Product
liability or warranty claims, 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 text under the heading “Risk
Factors” in Item 1A of the Company’s most recent Form 10-K. The
forward-looking statements included in this report on Form 8-K are
made only as of the date of this report, and the Company undertakes no
obligation to update the forward-looking statements to reflect subsequent events
or circumstances.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
|
|
TEXAS
INSTRUMENTS INCORPORATED
|
||
|
Date:
October 22, 2007
|
|
By:
|
|
/s/
Kevin P. March
|
|
|
|
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Kevin
P. March
|
|
|
|
|
|
Senior
Vice President
|
|
|
|
|
|
and
Chief Financial Officer
|
Exhibit
99
TI
Reports 3Q07 Financial Results
|
·
|
TI
Revenue Up 7% Sequentially, Down 3% from Year
Ago
|
|
·
|
EPS
of $0.52
|
|
·
|
Record
Gross and Operating Margins Supported by Strong Analog Revenue
Growth
|
Conference
Call on TI Web Site at 4:30 p.m. Central Time Today
www.ti.com
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.
DALLAS
(Oct. 22, 2007) – Texas Instruments Incorporated (TI) (NYSE: TXN) today reported
third-quarter 2007 revenue of $3.66 billion. Revenue increased 7
percent compared with the prior quarter primarily due to increased demand
for
analog semiconductor products. Back-to-school demand for graphing
calculators also contributed to sequential growth. TI revenue
decreased 3 percent from a year ago when customers were building
inventory.
Earnings
per share (EPS) were $0.52. This was an increase of $0.10, or 24
percent, from the prior quarter and $0.07, or 16 percent, from the year-ago
quarter. The third quarter’s financial results included a gain of
$0.02 from the sale of the company’s semiconductor product line for broadband
DSL customer-premises equipment. The gain on sale was included in the
company’s most recent business outlook issued September 11, 2007.
“Strong
growth in analog was at the core of our performance in the third
quarter. Our investments in analog technology have led to broader and
deeper engagements with customers. As a result, this part of our
business, which delivers about 40 percent of our revenue, grew 10 percent
sequentially,” said Rich Templeton, TI's president and chief executive
officer. “Our growth allows us to continue to increase our return to
shareholders. In the third quarter, we repurchased $1.4 billion of
our stock. In September, our Board authorized an additional $5
billion in repurchases, and we announced a 25 percent increase in the
dividend.”
Gross
Profit
Gross
profit was $1.98 billion, or 54.2 percent of revenue. This was up
$200 million from the prior quarter primarily due to higher revenue, as well
as
a gain of $39 million on the sale of TI’s DSL product line that is included in
cost of revenue. Gross profit was up $52 million from the year-ago
quarter as a combination of reduced manufacturing costs and the gain on sale
more than offset the impact of lower revenue.
Operating
Expenses
Research
and development (R&D) expense was $542 million. This was a
decrease of $9 million from the prior quarter and $28 million from the year-ago
quarter. The declines were due to progress in implementing the
company’s advanced CMOS process development strategy.
Selling,
general and administrative (SG&A) expense was $429 million. This
was about even with both the prior and year-ago quarters.
Operating
Profit
Operating
profit was $1.01 billion, or 27.6 percent of revenue. This was an
increase of $204 million from the prior quarter due to higher gross profit,
and
an increase of $83 million from the year-ago quarter due to higher gross
profit
and lower R&D expense.
Other
Income (Expense) Net (OI&E)
OI&E
was $53 million. This was a decrease of $3 million from the prior
quarter and $1 million from the year-ago quarter.
Income
Income
from continuing operations was $758 million, or $0.52 per
share. Income from discontinued operations was $18 million due to a
reduction of a state tax liability associated with the sale of TI’s former
Sensors & Controls business.
Orders
TI
orders were $3.55
billion. This was an increase of $103 million from the prior quarter
as higher demand for semiconductor products more than offset a seasonal decline
in orders for graphing calculator products. Orders were up $125
million from the year-ago quarter due to higher demand for semiconductor
products.
Cash
Cash
flow
from operations was $1.53 billion. This was an increase of $633
million from the prior quarter primarily due to the receipt of a tax refund
and
higher net income. Total cash (cash and cash equivalents plus
short-term investments) was $3.67 billion at the end of the third
quarter. This was an increase of $88 million from the end of the
prior quarter and a decrease of $515 million from the year-ago
quarter. In the third quarter of 2007, the company used $1.41 billion
to repurchase 40 million shares of common stock and paid $114 million in
dividends to shareholders. Since the end of the year-ago quarter, the
company has used $4.14 billion to repurchase 127 million shares of common
stock
and paid $346 million in dividends.
Capital
Spending and Depreciation
Capital
expenditures were $152 million. This was a decrease of $22 million
from the prior quarter and $124 million from the year-ago quarter due to
lower expenditures for semiconductor manufacturing equipment. TI’s
capital expenditures in the quarter were primarily for semiconductor assembly
and test equipment.
Depreciation
was $262 million. This was an increase of $6 million from the prior
quarter and a decrease of $4 million from the year-ago quarter.
Accounts
Receivable and Inventories
Accounts
receivable were $2.02 billion at the end of the third quarter. This
was an increase of $126 million from the prior quarter and a decrease of $66
million from the year-ago quarter due to changes in revenue. Days
sales outstanding were 50 at the end of the third quarter, unchanged from the
end of the prior quarter and the year-ago quarter.
Inventory
was $1.45 billion at the end of the third quarter. This was an
increase of $26
million from the prior quarter. Compared with a year ago, inventory
decreased $41 million. Days of inventory at the end of the third
quarter were 78, unchanged from the end of the prior quarter and up from 73
a
year ago.
Outlook
TI
intends to provide a mid-quarter update to its financial outlook on December
10, 2007, by issuing a press release and holding a conference
call. Both will be available on the company’s web site.
For
the fourth quarter of 2007, TI
expects revenue to be in the following ranges:
|
·
|
Total
TI, $3.40 billion to $3.68 billion;
|
|
·
|
Semiconductor,
$3.33 billion to $3.59 billion; and
|
|
·
|
Education
Technology, $70 million to $90
million.
|
TI
expects earnings per share to be in
the range of $0.48 to $0.54.
In
2007,
TI continues to expect R&D expense of about $2.2 billion and
depreciation of about $1.0 billion. TI now expects an annual
effective tax rate of about 29 percent compared with the prior expectation
of 28
percent, and capital expenditures of about $0.7 billion compared with the
prior expectation of $0.9 billion.
TEXAS
INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Consolidated
Statements of Income
(Millions
of dollars, except share and per-share amounts)
|
For
Three Months Ended
|
||||||||||||
|
Sept.
30,
2007
|
June
30,
2007
|
Sept.
30,
2006
|
||||||||||
|
Net
revenue
|
$ |
3,663
|
$ |
3,424
|
$ |
3,761
|
||||||
|
Cost
of revenue (COR)
|
1,679
|
1,640
|
1,829
|
|||||||||
|
Gross
profit
|
1,984
|
1,784
|
1,932
|
|||||||||
|
Research
and development (R&D)
|
542
|
551
|
570
|
|||||||||
|
Selling,
general and administrative (SG&A)
|
429
|
424
|
432
|
|||||||||
|
Total
operating costs and expenses
|
2,650
|
2,615
|
2,831
|
|||||||||
|
Profit
from operations
|
1,013
|
809
|
930
|
|||||||||
|
Other
income (expense) net
|
53
|
56
|
54
|
|||||||||
|
Income
from continuing operations before income taxes
|
1,066
|
865
|
984
|
|||||||||
|
Provision
for income taxes
|
308
|
251
|
298
|
|||||||||
|
Income
from continuing operations
|
758
|
614
|
686
|
|||||||||
|
Income
(loss) from discontinued operations, net of income taxes
|
18
|
(4 | ) |
16
|
||||||||
|
Net
income
|
$ |
776
|
$ |
610
|
$ |
702
|
||||||
|
Basic
earnings per common share:
|
||||||||||||
|
Income
from continuing operations
|
$ |
.54
|
$ |
.43
|
$ |
.46
|
||||||
|
Net
income
|
$ |
.55
|
$ |
.42
|
$ |
.47
|
||||||
|
Diluted
earnings per common share:
|
||||||||||||
|
Income
from continuing operations
|
$ |
.52
|
$ |
.42
|
$ |
.45
|
||||||
|
Net
income
|
$ |
.54
|
$ |
.42
|
$ |
.46
|
||||||
|
Average
shares outstanding (millions):
|
||||||||||||
|
Basic
|
1,417
|
1,437
|
1,506
|
|||||||||
|
Diluted
|
1,448
|
1,469
|
1,537
|
|||||||||
|
Cash
dividends declared per share of common stock
|
$ |
.08
|
$ |
.08
|
$ |
.03
|
||||||
|
Percentage
of revenue:
|
||||||||||||
|
Gross
profit
|
54.2 | % | 52.1 | % | 51.4 | % | ||||||
|
R&D
|
14.8 | % | 16.1 | % | 15.2 | % | ||||||
|
SG&A
|
11.7 | % | 12.4 | % | 11.5 | % | ||||||
|
Operating
profit
|
27.6 | % | 23.6 | % | 24.7 | % | ||||||
TEXAS
INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Consolidated
Balance Sheets
(Millions
of dollars, except share amounts)
|
Sept.
30,
2007
|
June
30,
2007
|
Sept.
30,
2006
|
||||||||||
|
Assets
|
||||||||||||
|
Current
assets:
|
||||||||||||
|
Cash
and cash equivalents
|
$ |
807
|
$ |
1,266
|
$ |
1,430
|
||||||
|
Short-term
investments
|
2,862
|
2,315
|
2,754
|
|||||||||
|
Accounts
receivable, net of allowances of ($30), ($27) and ($29)
|
2,023
|
1,897
|
2,089
|
|||||||||
|
Raw
materials
|
102
|
106
|
117
|
|||||||||
|
Work
in process
|
934
|
876
|
946
|
|||||||||
|
Finished
goods
|
414
|
442
|
428
|
|||||||||
|
Inventories
|
1,450
|
1,424
|
1,491
|
|||||||||
|
Deferred
income taxes
|
702
|
1,072
|
666
|
|||||||||
|
Prepaid
expenses and other current assets
|
209
|
246
|
191
|
|||||||||
|
Total
current assets
|
8,053
|
8,220
|
8,621
|
|||||||||
|
Property,
plant and equipment at cost
|
7,597
|
7,657
|
7,890
|
|||||||||
|
Less
accumulated depreciation
|
(3,916 | ) | (3,859 | ) | (3,901 | ) | ||||||
|
Property,
plant and equipment, net
|
3,681
|
3,798
|
3,989
|
|||||||||
|
Equity
and other long-term investments
|
265
|
254
|
270
|
|||||||||
|
Goodwill
|
796
|
792
|
792
|
|||||||||
|
Acquisition-related
intangibles
|
108
|
117
|
131
|
|||||||||
|
Deferred
income taxes
|
425
|
405
|
411
|
|||||||||
|
Capitalized
software licenses, net
|
242
|
259
|
175
|
|||||||||
|
Overfunded
retirement plans
|
77
|
79
|
--
|
|||||||||
|
Prepaid
retirement costs
|
--
|
--
|
308
|
|||||||||
|
Other
assets
|
77
|
96
|
88
|
|||||||||
|
Total
assets
|
$ |
13,724
|
$ |
14,020
|
$ |
14,785
|
||||||
|
Liabilities
and Stockholders’ Equity
|
||||||||||||
|
Current
liabilities:
|
||||||||||||
|
Loans
payable and current portion of long-term debt
|
$ |
--
|
$ |
--
|
$ |
43
|
||||||
|
Accounts
payable
|
644
|
622
|
744
|
|||||||||
|
Accrued
expenses and other liabilities
|
1,092
|
1,048
|
1,066
|
|||||||||
|
Income
taxes payable
|
152
|
187
|
458
|
|||||||||
|
Accrued
profit sharing and retirement
|
143
|
98
|
118
|
|||||||||
|
Total
current liabilities
|
2,031
|
1,955
|
2,429
|
|||||||||
|
Underfunded
retirement plans
|
95
|
115
|
--
|
|||||||||
|
Accrued
retirement costs
|
--
|
--
|
67
|
|||||||||
|
Deferred
income taxes
|
27
|
20
|
14
|
|||||||||
|
Deferred
credits and other liabilities
|
434
|
436
|
248
|
|||||||||
|
Total
liabilities
|
2,587
|
2,526
|
2,758
|
|||||||||
|
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, 2007 -- 1,739,579,782; June 30, 2007 --
1,739,467,307; Sept. 30, 2006 -- 1,739,102,544
|
1,740
|
1,739
|
1,739
|
|||||||||
|
Paid-in
capital
|
853
|
761
|
820
|
|||||||||
|
Retained
earnings
|
19,172
|
18,511
|
16,927
|
|||||||||
|
Less
treasury common stock at cost.
Shares: Sept.
30, 2007 -- 341,373,012; June
30, 2007 -- 310,382,046; Sept. 30, 2006 -- 255,218,212
|
(10,344 | ) | (9,233 | ) | (7,413 | ) | ||||||
|
Accumulated
other comprehensive income (loss), net of tax
|
(284 | ) | (284 | ) | (46 | ) | ||||||
|
Total
stockholders’ equity
|
11,137
|
11,494
|
12,027
|
|||||||||
|
Total
liabilities and stockholders’ equity
|
$ |
13,724
|
$ |
14,020
|
$ |
14,785
|
||||||
TEXAS
INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Consolidated
Statements of Cash Flows
(Millions
of dollars)
|
For
Three Months Ended
|
||||||||||||
|
Sept.
30,
2007
|
June
30,
2007
|
Sept.
30,
2006
|
||||||||||
|
Cash
flows from operating activities:
|
||||||||||||
|
Net
income
|
$ |
776
|
$ |
610
|
$ |
702
|
||||||
|
Adjustments
to reconcile net income to cash provided by
operating
activities of continuing operations:
|
||||||||||||
|
(Income)
loss from discontinued operations
|
(18 | ) |
4
|
(16 | ) | |||||||
|
Depreciation
|
262
|
256
|
266
|
|||||||||
|
Stock-based
compensation
|
66
|
69
|
79
|
|||||||||
|
Amortization
of capitalized software
|
24
|
24
|
26
|
|||||||||
|
Amortization
of acquisition-related intangibles
|
10
|
14
|
15
|
|||||||||
|
(Gains)
losses on sales of assets
|
(39 | ) |
--
|
--
|
||||||||
|
Deferred
income taxes
|
36
|
(3 | ) | (46 | ) | |||||||
|
Increase
(decrease) from changes in:
|
||||||||||||
|
Accounts
receivable
|
(117 | ) | (144 | ) | (149 | ) | ||||||
|
Inventories
|
(34 | ) | (15 | ) | (156 | ) | ||||||
|
Prepaid
expenses and other current assets
|
24
|
42
|
4
|
|||||||||
|
Accounts
payable and accrued expenses
|
154
|
110
|
81
|
|||||||||
|
Income
taxes payable
|
378
|
(132 | ) | (377 | ) | |||||||
|
Accrued
profit sharing and retirement
|
45
|
47
|
41
|
|||||||||
|
Change
in funded status of retirement plans and accrued
retirement
costs
|
(14 | ) |
--
|
(65 | ) | |||||||
|
Other
|
(22 | ) |
16
|
21
|
||||||||
|
Net
cash provided by operating activities of continuing
operations
|
1,531
|
898
|
426
|
|||||||||
|
Cash
flows from investing activities:
|
||||||||||||
|
Additions
to property, plant and equipment
|
(152 | ) | (174 | ) | (276 | ) | ||||||
|
Proceeds
from sales of assets
|
61
|
--
|
--
|
|||||||||
|
Purchases
of cash investments
|
(1,916 | ) | (1,479 | ) | (1,330 | ) | ||||||
|
Sales
and maturities of cash investments
|
1,374
|
1,529
|
2,585
|
|||||||||
|
Purchases
of equity investments
|
(15 | ) | (6 | ) | (11 | ) | ||||||
|
Sales
of equity and other long-term investments
|
4
|
3
|
--
|
|||||||||
|
Acquisitions,
net of cash acquired
|
(4 | ) |
--
|
--
|
||||||||
|
Net
cash provided by (used in) investing activities of continuing
operations
|
(648 | ) | (127 | ) |
968
|
|||||||
|
Cash
flows from financing activities:
|
||||||||||||
|
Payments
on loans and long-term debt
|
--
|
(43 | ) |
--
|
||||||||
|
Dividends
paid
|
(114 | ) | (115 | ) | (46 | ) | ||||||
|
Sales
and other common stock transactions
|
166
|
374
|
82
|
|||||||||
|
Excess
tax benefit from stock option exercises
|
16
|
56
|
21
|
|||||||||
|
Stock
repurchases
|
(1,409 | ) | (742 | ) | (1,695 | ) | ||||||
|
Net
cash used in financing activities of continuing operations
|
(1,341 | ) | (470 | ) | (1,638 | ) | ||||||
|
Effect
of exchange rate changes on cash
|
(1 | ) |
--
|
(4 | ) | |||||||
|
Net
increase (decrease) in cash and cash equivalents
|
(459 | ) |
301
|
(248 | ) | |||||||
|
Cash
and cash equivalents, beginning of period
|
1,266
|
965
|
1,678
|
|||||||||
|
Cash
and cash equivalents, end of period
|
$ |
807
|
$ |
1,266
|
$ |
1,430
|
||||||
Certain
amounts in the prior periods’ financial statements have been reclassified to
conform to the current presentation.
Segment
Net Revenue
(Millions
of dollars)
|
For
Three Months Ended
|
||||||||||||
|
Sept.
30,
2007
|
June
30,
2007
|
Sept.
30,
2006
|
||||||||||
|
Semiconductor
|
$ |
3,461
|
$ |
3,257
|
$ |
3,579
|
||||||
|
Education
Technology
|
202
|
167
|
182
|
|||||||||
|
Total
net revenue
|
$ |
3,663
|
$ |
3,424
|
$ |
3,761
|
||||||
Segment
Profit (Loss)
(Millions
of dollars)
|
For
Three Months Ended
|
||||||||||||
|
Sept.
30,
2007
|
June
30,
2007
|
Sept.
30,
2006
|
||||||||||
|
Semiconductor
|
$ |
1,031
|
$ |
905
|
$ |
1,008
|
||||||
|
Education
Technology
|
99
|
74
|
83
|
|||||||||
|
Corporate*
|
(117 | ) | (170 | ) | (161 | ) | ||||||
|
Profit
from operations
|
$ |
1,013
|
$ |
809
|
$ |
930
|
||||||
|
*
Corporate includes a gain on the sale of the company's semiconductor
product line for broadband DSL customer-premises equipment of $39
in the
third quarter of 2007 in cost of revenue. Corporate also includes
the following stock-based compensation expense:
|
||||||||||||
|
COR
|
$ |
12
|
$ |
13
|
$ |
15
|
||||||
|
R&D
|
20
|
21
|
24
|
|||||||||
|
SG&A
|
34
|
35
|
40
|
|||||||||
|
Profit
from operations
|
$ |
66
|
$ |
69
|
$ |
79
|
||||||
Semiconductor
|
·
|
Revenue
in the third quarter was $3.46 billion. This was an increase of
6 percent from the prior quarter primarily due to higher demand for
analog
products, as well as for DSP products used in cell phone
applications. Compared with a year ago, revenue decreased 3
percent as higher analog product revenue was more than offset by
declines
across a broad base of other
products.
|
|
o
|
Analog
product revenue of $1.40 billion was up 10 percent from the prior
quarter
primarily due to increased demand for high-performance analog products,
as
well as a broad range of analog products used in other applications,
especially storage devices. Compared with the year-ago quarter,
analog revenue increased 2 percent due to gains in high-performance
analog. Revenue from high-performance analog products increased
13 percent from the prior quarter and 10 percent from a year
ago.
|
|
o
|
DSP
product revenue of $1.31 billion was up 6 percent from the prior
quarter
primarily due to higher demand for products used in cell phone
applications. DSP product revenue declined 4 percent from a
year ago primarily due to products used in wireless network
infrastructure and cell phone
applications.
|
|
·
|
TI’s
remaining Semiconductor revenue of $751 million was about even with
the
prior quarter as growth in microcontroller, standard logic and RISC
microprocessor product revenue offset a decline in DLP®
product
revenue. Royalties also grew on a sequential
basis. TI’s remaining Semiconductor revenue decreased 10
percent from the year-ago quarter primarily due to declines in DLP,
RISC
microprocessor and standard logic product revenue, while royalties
and
microcontroller product revenue grew compared with the year-ago
quarter.
|
|
·
|
Gross
profit was $1.84 billion, or 53.2 percent of revenue. This was
an increase of $132 million from the prior quarter primarily due
to higher
revenue. Compared with the year-ago quarter, gross profit was
about even primarily due to reduced manufacturing costs, which
offset the
impact of lower revenue.
|
|
·
|
Operating
profit was $1.03 billion, or 29.8 percent of revenue. This was
an increase of $126 million from the prior quarter due to higher
gross
profit. It was an increase of $23 million from the year-ago
quarter due to lower R&D
expense.
|
|
·
|
Semiconductor
orders were $3.44 billion. This was an increase of 6 percent
from the prior quarter and 4 percent from the year-ago quarter primarily
due to higher demand for analog and DSP
products.
|
Semiconductor
Highlights
|
·
|
TI
introduced the industry's lowest power zero-crossover operational
amplifier. This high-performance analog product’s unique
architecture improves performance and simplifies designs in
battery-powered, portable
applications.
|
|
·
|
TI
launched a new, low-cost DaVinciTM
processor
that doubles the battery life of portable, high-definition video
products such as digital cameras and IP video security
cameras.
|
|
·
|
TI
introduced a power management battery fuel gauge chip that predicts
battery life with 99 percent accuracy in smartphones and other
handheld devices.
|
Education
Technology
|
·
|
Revenue
in the third quarter was $202 million. This was an increase of
$35 million from the prior quarter as retailers purchased calculators
for
the back-to-school season. It was an increase of $20 million
from the year-ago quarter as some major retailers shifted calculator
purchases from the second into the third quarter in order to
be closer to the start of the school
year.
|
|
·
|
Gross
profit was $136 million, or a record 67.1 percent of
revenue. This was up $27 million from the prior quarter and $20
million from the year-ago quarter due to higher
revenue.
|
|
·
|
Operating
profit was $99 million, or a record 49.1 percent of
revenue. This was an increase of $25 million compared with the
prior quarter and $16 million compared with the year-ago quarter
due to
higher gross profit.
|
# # #
Safe
Harbor Statement
“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 in this release that
describe our 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 for analog chips and digital
signal processors
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 company
forecasts;
|
|
·
|
The
financial impact of inadequate or excess TI inventories to meet demand
that differs from projections;
|
|
·
|
Product
liability or warranty claims, 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 text under the heading “Risk
Factors” in Item 1A of our most recent Form 10-K. The forward-looking
statements included in this release are made only as of the date of publication,
and we undertake no obligation to update the forward-looking statements to
reflect subsequent events or circumstances.
About
Texas Instruments
Texas
Instruments Incorporated provides innovative DSP and analog technologies to
meet
our customers’ real world signal processing requirements. In addition
to Semiconductor, the company includes the Education Technology
business. TI is headquartered in Dallas, Texas, and has
manufacturing, design or sales operations in more than 25
countries.
Texas
Instruments is traded on the New York Stock Exchange under the symbol
TXN. More information is located on the World Wide Web at
www.ti.com.
TI
Trademarks:
DLP
DaVinci
Other
trademarks are the property of their respective owners.