TI Reports Market may be Stabilizing Following Decline in Revenues

January 23, 2020 by Paul Shepard

Texas Instruments Incorporated (TI) today reported fourth quarter revenue of $3.35 billion, net income of $1.07 billion and earnings per share of $1.12. Earnings per share include a 1-cent benefit for items that were not in the company's original guidance.

Regarding the company's performance and returns to shareholders, Rich Templeton, TI's chairman, president and CEO, made the following comments: "Revenue decreased 10% from the same quarter a year ago as most markets showed signs of stabilizing.

"In our core businesses, Analog revenue declined 5% and Embedded Processing declined 20% from the same quarter a year ago.

"Our cash flow from operations of $6.6 billion for the year again underscored the strength of our business model. Free cash flow for the year was $5.8 billion and 40% of revenue. This reflects the quality of our product portfolio, as well as the efficiency of our manufacturing strategy, including the benefit of 300-millimeter Analog production.

"We returned $6.0 billion to owners in 2019 through stock repurchases and dividends. For the year, our dividends represented 52% of free cash flow, underscoring their sustainability. Together, our stock repurchases and dividends reflect our continued commitment to return all free cash flow to our owners.

"TI's first quarter outlook is for revenue in the range of $3.12 billion to $3.38 billion, and earnings per share between $0.96 and $1.14, which includes an estimated $20 million discrete tax benefit. We continue to expect our 2020 annual operating tax rate to be about 15%."

Compared with the year-ago quarter:

  • Analog: (includes Power, Signal Chain and High Volume)
    • Revenue decreased in Signal Chain, High Volume and Power.
    • Operating profit decreased primarily due to lower revenue and associated gross profit.
  • Embedded Processing: (includes Connected Microcontrollers and Processors)
    • Revenue decreased primarily due to Processors. Connected Microcontrollers also declined.
    • Operating profit decreased due to lower revenue and associated gross profit.
  • Other: (includes DLP® products, calculators and custom ASIC products)
    • Revenue decreased $68 million, and operating profit decreased $10 million.