Texas Instruments Incorporated (TI) reported second-quarter revenue of $3.27 billion up 1% from $3.23 billion in the second-quarter of last year, net income of $779 million up 12% from $696 million in the year-ago quarter, and earnings per share of 76 cents, up 17% from 65 cents in Q2 of 2015.
Regarding the company's performance and returns to shareholders, Rich Templeton, TI's chairman, president and CEO, made the following comments: "Revenue and earnings per share for the quarter were solidly in the upper half of our expected range. Compared with a year ago, demand for our products continued to be strong in the automotive market, and grew in the industrial and communications equipment markets. Despite sequential growth, demand in the personal electronics market was down from a year ago.
"In our core businesses, Embedded Processing revenue grew 9 percent and Analog revenue was about even with the same quarter a year ago. Operating margin increased in both businesses.
"Gross margin of 61.2 percent reflected 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 of $4.5 billion for the trailing 12 months again underscored the strength of our business model. Free cash flow for the trailing 12 months was up 7 percent from a year ago to $3.9 billion, and this represents 30.0 percent of revenue, up from 27.4 percent a year ago.
"We have 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 $2.5 billion of cash and short-term investments at the end of the quarter, about 80 percent of which was owned by the company's U.S. entities. Inventory ended the quarter at 133 days.
"TI's third-quarter outlook is for revenue in the range of $3.34 billion to $3.62 billion, and earnings per share between 81 and 91 cents. For 2016, TI's annual effective tax rate is expected to be about 30 percent, unchanged from previous guidance," Templeton concluded.
