Texas Instruments (TXN) Tops Q3 EPS by 8c; Issues Strong Q4 EPS Outlook
Texas Instruments (NASDAQ: TXN) reported Q3 EPS of $0.76, $0.08 better than the analyst estimate of $0.68. Revenue for the quarter came in at $3.43 billion versus the consensus estimate of $3.28 billion.
Regarding the company's performance and returns to shareholders, Rich Templeton, TI's chairman, president and CEO, made the following comments:
- "Revenue declined 2 percent from a year ago. While our overall demand remained weak, revenue was stronger than we expected.
- "Our core businesses of Analog and Embedded Processing each grew year over year. Together, they comprised 85 percent of third-quarter revenue and have delivered nine consecutive quarters of year-over-year growth.
- "Gross margin was 58.2 percent of revenue, reflecting 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 once again underscored the strength of our business model. Free cash flow for the trailing 12 months was up 4 percent from a year ago to $3.6 billion. This represents 28 percent of revenue, up from 27 percent a year ago, and is consistent with our targeted range of 20-30 percent of revenue.
- "We have returned $4.2 billion to shareholders in the past 12 months through stock repurchases and dividends. In September, we announced a quarterly dividend increase of 4 cents per share, a 12 percent increase. This marked 12 consecutive years of dividend increases. We also announced a $7.5 billion increase to our share buyback authorization.
- "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 $2.7 billion of cash and short-term investments at the end of the quarter, 82 percent of which was owned by the company's U.S. entities. Inventory ended the quarter at 111 days.
Texas Instruments sees Q4 2015 EPS of $0.64-$0.74, versus the consensus of $0.62. Texas Instruments sees Q4 2015 revenue of $3.07-3.33 billion, versus the consensus of $3.12 billion.
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