TI reports third quarter 2023 financial results and shareholder returns
Conference call on TI website at 3:30 p.m. Central time today
PR Newswire
DALLAS, Oct. 24, 2023
DALLAS, Oct. 24, 2023 — Texas Instruments Incorporated (TI) (Nasdaq: TXN) today reported third quarter revenue of $4.53 billion, net income of $1.71 billion and earnings per share of $1.85. Earnings per share included a 5-cent benefit for items that were not in the company’s original guidance.
Regarding the company’s performance and returns to shareholders, Haviv Ilan, TI’s president and CEO, made the following comments:
-- "Revenue was flat sequentially and decreased 14% from the same quarter a
year ago. During the quarter, automotive growth continued and industrial
weakness broadened.
-- "Our cash flow from operations of $6.5 billion for the trailing 12 months
again underscored the strength of our business model, the quality of our
product portfolio and the benefit of 300-mm production. Free cash flow
for the same period was $1.6 billion.
-- "Over the past 12 months we invested $3.7 billion in R&D and SG&A,
invested $4.9 billion in capital expenditures and returned $5.6 billion
to owners.
-- "TI's fourth quarter outlook is for revenue in the range of $3.93 billion
to $4.27 billion and earnings per share between $1.35 and $1.57. We
continue to expect our 2023 effective tax rate to be about 13% to 14%."
Free cash flow, a non-GAAP financial measure, is cash flow from operations less capital expenditures.
Earnings summary
(In millions, except per-share amounts) Q3 2023 Q3 2022 Change
--------- --------- ------
Revenue $ 4,532 $ 5,241 (14) %
Operating profit $ 1,892 $ 2,678 (29) %
Net income $ 1,709 $ 2,295 (26) %
Earnings per share $ 1.85 $ 2.47 (25) %
Cash generation
Trailing 12 Months
--------------------------
(In millions) Q3 2023 Q3 2023 Q3 2022 Change
--------- --------- ------- ------
Cash flow from operations $ 1,937 $ 6,538 $ 9,035 (28) %
Capital expenditures $ 1,495 $ 4,890 $ 3,112 57 %
Free cash flow $ 442 $ 1,648 $ 5,923 (72) %
Free cash flow % of revenue 9.1 % 29.3 %
Cash return
Trailing 12 Months
----------------------------
(In millions) Q3 2023 Q3 2023 Q3 2022 Change
--------- --------- --------- ------
Dividends paid $ 1,126 $ 4,499 $ 4,236 6 %
Stock repurchases $ 46 $ 1,076 $ 2,909 (63) %
Total cash returned $ 1,172 $ 5,575 $ 7,145 (22) %
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
For Three Months Ended
Consolidated Statements of Income September 30,
------------------------------------------- --------------------------
(In millions, except per-share amounts) 2023 2022
-------------- ----------
Revenue $ 4,532 $ 5,241
Cost of revenue (COR) 1,717 1,624
---------- ---------
Gross profit 2,815 3,617
Research and development (R&D) 471 431
Selling, general and administrative (SG&A) 452 431
Restructuring charges/other -- 77
---------- ---------
Operating profit 1,892 2,678
Other income (expense), net (OI&E) 128 33
Interest and debt expense 98 53
---------- ---------
Income before income taxes 1,922 2,658
Provision for income taxes 213 363
---------- ---------
Net income $ 1,709 $ 2,295
========== =========
Diluted earnings per common share $ 1.85 $ 2.47
========== =========
Average shares outstanding:
Basic 908 913
========== =========
Diluted 916 923
========== =========
Cash dividends declared per common share $ 1.24 $ 1.15
========== =========
Supplemental Information
(Quarterly, except as noted)
Provision for income taxes is based on the
following:
Operating taxes (calculated using the
estimated annual effective tax rate) $ 229 $ 391
Discrete tax items (16) (28)
---------- ---------
Provision for income taxes (effective taxes) $ 213 $ 363
========== =========
A portion of net income is allocated to unvested restricted stock units
(RSUs) on which we pay dividend
equivalents. Diluted EPS is calculated using the following:
Net income $ 1,709 $ 2,295
Income allocated to RSUs (10) (11)
---------- ---------
Income allocated to common stock for diluted
EPS $ 1,699 $ 2,284
========== =========
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheets September 30,
----------------------------------------------- --------------------
(In millions, except par value) 2023 2022
--------- ---------
Assets
Current assets:
Cash and cash equivalents $ 2,566 $ 3,169
Short-term investments 6,382 5,921
Accounts receivable, net of allowances of
($15) and ($10) 1,976 2,040
Raw materials 401 333
Work in process 2,147 1,347
Finished goods 1,360 724
-------- --------
Inventories 3,908 2,404
Prepaid expenses and other current assets 265 238
-------- --------
Total current assets 15,097 13,772
-------- --------
Property, plant and equipment at cost 12,528 9,491
Accumulated depreciation (3,208) (3,006)
-------- --------
Property, plant and equipment 9,320 6,485
Goodwill 4,362 4,362
Deferred tax assets 632 291
Capitalized software licenses 138 75
Overfunded retirement plans 166 273
Other long-term assets 1,923 799
-------- --------
Total assets $ 31,638 $ 26,057
======== ========
Liabilities and stockholders' equity
Current liabilities:
Current portion of long-term debt $ 300 $ 499
Accounts payable 713 780
Accrued compensation 707 662
Income taxes payable 108 123
Accrued expenses and other liabilities 824 734
-------- --------
Total current liabilities 2,652 2,798
-------- --------
Long-term debt 10,922 7,438
Underfunded retirement plans 141 69
Deferred tax liabilities 66 92
Other long-term liabilities 1,226 1,153
-------- --------
Total liabilities 15,007 11,550
-------- --------
Stockholders' equity:
Preferred stock, $25 par value. Shares
authorized -- 10; none issued -- --
Common stock, $1 par value. Shares authorized
-- 2,400; shares issued -- 1,741 1,741 1,741