Texas Instruments Third-Quarter Net Income Rises 78% To $2.43 Billion As Capital Spending Drops
Trailing 12-month free cash flow reached $8.42 billion, and the chipmaker guided fourth-quarter revenue to $5.80 billion to $6.30 billion.
Texas Instruments earned $2.43 billion in the third quarter, up 78% from $1.36 billion a year earlier, according to an 8-K and attached earnings release filed Wednesday. Revenue rose 28% to $6.06 billion, and earnings per share were $2.62 versus $1.48.
What the earnings release says
Operating profit climbed 73% to $2.87 billion. Gross profit grew to $3.89 billion from $2.72 billion, while cost of revenue rose only to $2.17 billion from $2.02 billion. Earnings per share included a 1-cent reduction that was not in the company's original guidance.
Chairman, president and CEO Haviv Ilan said revenue rose 11% from the prior quarter, with "continued broad growth in industrial, automotive and data center."
By segment, analog revenue rose 32% to $4.91 billion, with operating profit up 69% to $2.51 billion. Embedded processing revenue rose 21% to $858 million, and its operating profit more than doubled, up 110% to $227 million. The "Other" category's revenue fell 6% to $286 million.
Cash: less spent on factories, less spent on buybacks
Capital spending in the quarter was $463 million, versus $1.20 billion a year earlier. Free cash flow, a measure outside standard accounting (operating cash flow less capital spending, plus CHIPS Act incentive proceeds), was $8.42 billion over the trailing 12 months, up from $2.42 billion. Over that span, operating cash flow was $9.90 billion.
Buybacks over the 12 months fell 61% to $636 million, while dividends paid rose 5% to $5.17 billion. Total cash returned was $5.81 billion, down 11% from $6.56 billion.
Ilan said the company invested $2.6 billion in capital expenditures over the 12 months and $4.0 billion in R&D and SG&A, and returned $5.8 billion to owners.
Outlook
For the fourth quarter, TI guided to revenue of $5.80 billion to $6.30 billion and earnings per share of $2.45 to $2.79. The filing was accepted by EDGAR Wednesday after the market close; the stock closed Wednesday at $284.65. The company scheduled its conference call for 3:30 p.m. Central on Wednesday.
The fourth-quarter report will show how actual revenue compares with the $5.80 billion to $6.30 billion range TI gave.
