TI Q2 Revenue Down Due to Broad-Based Weakness, but still Above Expectations

July 26, 2019 by Scott McMahan

Texas Instruments (TI) reported second-quarter revenue of $3.67 billion. The company posted net income of $1.31 billion and reported earnings per share of $1.36. Earnings per share include a 7-cent benefit for items that were not in the company's original guidance.

In a conference call, company executives pointed out that TI has not sustained a decline in sales related to trade or regional differences in orders.

Rich Templeton, TI's chairman, president, and CEO, commented, "Revenue decreased 9% from the same quarter a year ago due to broad-based weakness.

"In our core businesses, Analog revenue declined 6% and Embedded Processing declined 16% from the same quarter a year ago.

"Our cash flow from operations of $7.2 billion for the trailing 12 months again underscored the strength of our business model. Free cash flow for the trailing 12 months was $5.9 billion and 39% 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.

The company, which reportedly gets the largest portion of its revenues from makers of industrial equipment and vehicles, projects third-quarter revenue to range from roughly the same up to about 7.6% higher compared to the second quarter.

"TI's third quarter outlook is for revenue in the range of $3.65 billion to $3.95 billion, and earnings per share between $1.31 and $1.53, which includes an estimated $10 million discrete tax benefit, " Templeton said.

The positive outlook on revenue may indicate that the company's declining revenues from electronic components could rise soon.