Texas Instruments Inc. (TI) announced first-quarter revenue of $3.12 billion, net income of $265 million and earnings per share of 22 cents. EPS includes 10 cents of charges associated with the company’s acquisition of National Semiconductor and restructuring.
"As we expected, our business cycle bottomed in the first quarter, and early signs of growth began to emerge," said Rich Templeton, TI’s chairman, president and CEO. "Orders were up 13 percent, and backlog is growing again. Particularly encouraging is the breadth of increased orders across geographical regions and markets, including the industrial sector.
"Sales in our Analog segment were about level with the prior quarter. We continue to make progress with Silicon Valley Analog, formerly National Semiconductor, as this product line gains traction with customers and holds a strong position in the important industrial market. Sales in Embedded Processing were up 7 percent led by growth in the automotive and communications infrastructure markets. Sales in our Wireless segment declined sharply as we entered the final phase of our exit from baseband products, which were less than 3 percent of total sales in the quarter. We are expanding the reach of our Wireless segment into multiple markets and experiencing strong diversity in our design-ins.
"We’re poised for growth and share gains as markets rebound. Our product portfolio is strong, and our design position with customers is excellent. Our inventory is well-staged, and production in our factories is ramping. Our teams are confident and hungry, and we expect 2012 to be a good year for growth."
Total acquisition-related charges associated with TI’s September 2011 acquisition of National Semiconductor are $174 million in the first quarter. These charges include $21 million in cost of revenue associated with the contract termination of a distributor. The remainder, $153 million, includes amortization of intangibles, retention bonuses and other items. Results also include $10 million of restructuring charges associated with the planned closings of two older factories announced in January 2012.
Revenue in the quarter includes insurance proceeds of about $65 million related to interruption of TI’s business operations as a result of the 2011 Japan earthquake.
Compared with a year ago, lower gross profit in the quarter primarily reflects lower revenue. Compared with the fourth quarter, lower gross profit reflects lower revenue, which was partially offset by lower charges to cost of revenue related to the National acquisition and an increase in insurance proceeds.
Operating profit declined from a year ago primarily due to lower gross profit, total acquisition-related charges and higher operating expenses due to the inclusion of Silicon Valley Analog. Compared with the prior quarter, operating profit was higher primarily due to lower restructuring charges and lower total acquisition-related charges.
