Texas Instruments (TXN) Tops Q3 EPS by 5c; Guides Q4 EPS Ahead of Views

Texas Instruments (NASDAQ: TXN) reported Q3 EPS of $0.76, $0.05 better than the analyst estimate of $0.71. Revenue for the quarter came in at $3.5 billion versus the consensus estimate of $3.46 billion.

Regarding the company's performance and returns to shareholders, Rich Templeton, TI's chairman, president and CEO, made the following comments:

• "Revenue for the quarter was solidly in the upper half of our expected range and earnings were at the top of the range, marking another quarter of strong progress and execution.
• "We delivered 8 percent year-over-year revenue growth. Analog and Embedded Processing comprised 82 percent of third-quarter revenue.
• "Gross margin of 58.4 percent, a new record, reflects the quality of our portfolio of Analog and Embedded Processing products as well as the efficiency of our manufacturing strategy.
• "Our cash flow from operations once again reflects the strength of our business model. Free cash flow for the trailing twelve-month period was up 20 percent from a year ago to $3.5 billion or 27 percent of revenue. This represents an improvement of 3 percentage points from a year ago and is consistent with our targeted range of 20-30 percent of revenue.
• "We returned $4.2 billion to shareholders in the past twelve months through stock repurchases and dividends paid. In the quarter, we announced a dividend increase of 13 percent, resulting in an annualized rate of $1.36 per share.
• "Our strategy to return to shareholders all free cash flow not needed for net debt retirement, and to return proceeds from exercises of equity compensation, reflects our confidence in the long-term sustainability of our business model.
• "Our balance sheet remains strong, with $3.2 billion of cash and short-term investments at the end of the quarter, 81 percent of which was owned by the company's U.S. entities. Inventory days were 108, consistent with our model of 105-115 days.

Texas Instruments sees Q414 EPS of $0.64 - $0.74. Texas Instruments seesQ414 revenue of $3.13 - $3.39 billion. Consensus estimates are at Q4 EPS of $0.63 and revs of $3.25 billion.

For earnings history and earnings-related data on Texas Instruments (TXN) click here.

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