TI reports first quarter 2024 financial results and shareholder returns
DALLAS, April 23, 2024 /PRNewswire/ -- Texas Instruments Incorporated (TI) (Nasdaq: TXN) today reported first quarter revenue of $3.66 billion, net income of $1.11 billion and earnings per share of $1.20. Earnings per share included a 10-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 decreased 16% from the same quarter a year ago and 10%
sequentially, as revenue declined across all end markets.
-- "Our cash flow from operations of $6.3 billion for the trailing 12
months again underscored the strength of our business model, the quality
of our product portfolio and the benefit of 300mm production. Free cash
flow for the same period was $940 million.
-- "Over the past 12 months we invested $3.7 billion in R&D and SG&A,
invested $5.3 billion in capital expenditures and returned $4.8 billion
to owners.
-- "TI's second quarter outlook is for revenue in the range of $3.65
billion to $3.95 billion and earnings per share between $1.05 and $1.25.
We continue to expect our effective tax rate to be about 13%."
Free cash flow, a non-GAAP financial measure, is cash flow from operations less capital expenditures.
Earnings summary
(In millions, except per-share amounts) Q1 2024 Q1 2023 Change
Revenue $
3,661 $
4,379 (16) %
Operating profit $
1,286 $
1,934 (34) %
Net income $
1,105 $
1,708 (35) %
Earnings per share $
1.20 $
1.85 (35) %
Cash generation
Trailing 12 Months
(In millions) Q1 2024 Q1 2024 Q1 2023 Change
Cash flow from operations $
1,017 $
6,277 $
7,736 (19) %
Capital expenditures $
1,248 $
5,337 $
3,336 60 %
Free cash flow $
(231) $
940 $
4,400 (79) %
Free cash flow % of
revenue 5.6 % 22.6 %
Cash return
Trailing 12 Months
(In
millions) Q1 2024 Q1 2024 Q1 2023 Change
Dividends
paid $
1,183 $
4,615 $
4,359 6 %
Stock
repurchases $
3 $
193 $
3,129 (94) %
Total
cash
returned $
1,186 $
4,808 $
7,488 (36) %
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Income For Three Months Ended
March 31,
(In millions, except per-share amounts) 2024 2023
Revenue $
3,661 $
4,379
Cost of revenue (COR) 1,566 1,516
Gross profit 2,095 2,863
Research and development (R&D) 478 455
Selling, general and administrative (SG&A) 455 474
Restructuring charges/other (124)
Operating profit 1,286 1,934
Other income (expense), net (OI&E) 123 80
Interest and debt expense 116 68
Income before income taxes 1,293 1,946
Provision for income taxes 188 238
Net income $
1,105 $
1,708
Diluted earnings per common share $
1.20 $
1.85
Average shares outstanding:
Basic 910 907
Diluted 917 916
Cash dividends declared per common share $
1.30 $
1.24
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) $
176 $
276
Discrete tax items 12 (38)
Provision for income taxes (effective taxes) $
188 $
238
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 $
1,105 $
1,708
Income allocated to RSUs (5) (9)
Income allocated to common stock for diluted EPS $
1,100 $
1,699
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheets March 31,
(In millions, except par value) 2024 2023
Assets
Current assets:
Cash and cash equivalents $
2,483 $
4,477
Short-term investments 7,910 5,068
Accounts receivable, net of allowances of ($20) and ($13) 1,671 1,877
Raw materials 417 378
Work in process 2,129 1,850
Finished goods 1,537 1,060
Inventories 4,083 3,288
Prepaid expenses and other current assets 1,301 313
Total current assets 17,448 15,023
Property, plant and equipment at cost 13,739 10,791
Accumulated depreciation (3,297) (3,126)
Property, plant and equipment 10,442 7,665
Goodwill 4,362 4,362
Deferred tax assets 821 486
Capitalized software licenses 231 140
Overfunded retirement plans 169 189
Other long-term assets 1,412 1,355
Total assets $
34,885 $
29,220
Liabilities and stockholders' equity
Current liabilities:
Current portion of long-term debt $
1,349 $
500
Accounts payable 551 952
Accrued compensation 399 394
Income taxes payable 378 372
Accrued expenses and other liabilities 876 686
Total current liabilities 3,553 2,904
Long-term debt 12,840 9,626
Underfunded retirement plans 111 123
Deferred tax liabilities 55 73
Other long-term liabilities 1,343 1,251
Total liabilities 17,902 13,977
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
Paid-in capital 3,439 3,016
Retained earnings 52,199 50,930
Treasury common stock at cost
Shares: March 31, 2024 - 831; March 31, 2023 - 833 (40,193) (40,192)
Accumulated other comprehensive income (loss), net of taxes (AOCI) (203) (252)
Total stockholders' equity 16,983 15,243
Total liabilities and stockholders' equity $
34,885 $
29,220
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Cash Flows For Three Months Ended
March 31,
(In millions) 2024 2023
Cash flows from operating activities
Net income $
1,105 $
1,708
Adjustments to net income:
Depreciation 346 265
Amortization of capitalized software 16 16
Stock compensation 106 104
Gains on sales of assets (129)
Deferred taxes (71) (8)
Increase (decrease) from changes in:
Accounts receivable 116 18
Inventories (84) (531)
Prepaid expenses and other current assets (24) (4)
Accounts payable and accrued expenses (77) (124)
Accrued compensation (444) (407)
Income taxes payable 212 185
Changes in funded status of retirement plans 17 6
Other (72) (68)
Cash flows from operating activities 1,017 1,160
Cash flows from investing activities
Capital expenditures (1,248) (982)
Proceeds from asset sales 192 1
Purchases of short-term investments (4,864) (3,013)
Proceeds from short-term investments 2,631 4,026
Other (40) (4)
Cash flows from investing activities (3,329) 28
Cash flows from financing activities
Proceeds from issuance of long-term debt 2,980 1,397
Dividends paid (1,183) (1,125)
Stock repurchases (3) (103)
Proceeds from common stock transactions 65 85
Other (28) (15)
Cash flows from financing activities 1,831 239
Net change in cash and cash equivalents (481) 1,427
Cash and cash equivalents at beginning of period 2,964 3,050
Cash and cash equivalents at end of period $
2,483 $
4,477
Segment results
(In millions) Q1 2024 Q1 2023 Change
Analog:
Revenue $
2,836 $
3,289 (14) %
Operating profit $
1,008 $
1,574 (36) %
Embedded Processing:
Revenue $
652 $
832 (22) %
Operating profit $
105 $
237 (56) %
Other:
Revenue $
173 $
258 (33) %
Operating profit* $
173 $
123 41 %
* Includes restructuring charges/other.
Non-GAAP financial information
This release includes references to free cash flow and ratios based on that measure. These are financial measures that were not prepared in accordance with GAAP. Free cash flow was calculated by subtracting capital expenditures from the most directly comparable GAAP measure, cash flows from operating activities (also referred to as cash flow from operations).
We believe that free cash flow and the associated ratios provide insight into our liquidity, our cash-generating capability and the amount of cash potentially available to return to shareholders, as well as insight into our financial performance. These non-GAAP measures are supplemental to the comparable GAAP measures.
Reconciliation to the most directly comparable GAAP measures is provided in the table below.
For 12 Months Ended
March 31,
(In millions) 2024 2023 Change
Cash flow from operations (GAAP) $
6,277 $
7,736 (19) %
Capital expenditures (5,337) (3,336)
Free cash flow (non-GAAP) $
940 $
4,400 (79) %
Revenue $
16,801 $
19,502
Cash flow from operations as a percentage of revenue (GAAP) 37.4 % 39.7 %
Free cash flow as a percentage of revenue (non-GAAP) 5.6 % 22.6 %
This release also includes references to operating taxes, a non-GAAP term we use to describe taxes calculated using the estimated annual effective tax rate, a GAAP measure that by definition does not include discrete tax items. We believe the term operating taxes helps to differentiate from effective taxes, which include discrete tax items.
Notice regarding forward-looking statements
This release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as TI or its management "believes," "expects," "anticipates," "foresees," "forecasts," "estimates" or other words or phrases of similar import. Similarly, statements herein that describe TI's business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements.
We urge you to carefully consider the following important factors that could cause actual results to differ materially from the expectations of TI or our management:
-- Economic, social and political conditions, and natural events in the
countries in which we, our customers or our suppliers operate, including
global trade policies;
-- Market demand for semiconductors, particularly in the industrial and
automotive markets, and customer demand that differs from forecasts;
-- Our ability to compete in products and prices in an intensely
competitive industry;
-- Evolving cybersecurity and other threats relating to our information
technology systems or those of our customers, suppliers and other third
parties;
-- Our ability to successfully implement and realize opportunities from
strategic, business and organizational changes, or our ability to
realize our expectations regarding the amount and timing of associated
restructuring charges and cost savings;
-- Our ability to develop, manufacture and market innovative products in a
rapidly changing technological environment, our timely implementation of
new manufacturing technologies and installation of manufacturing
equipment, and our ability to realize expected returns on significant
investments in manufacturing capacity;
-- Availability and cost of key materials, utilities, manufacturing
equipment, third-party manufacturing services and manufacturing
technology;
-- Our ability to recruit and retain skilled personnel and effectively
manage key employee succession;
-- Product liability, warranty or other claims relating to our products,
software, manufacturing, delivery, services, design or communications,
or recalls by our customers for a product containing one of our parts;
-- Compliance with or changes in the complex laws, rules and regulations to
which we are or may become subject, or actions of enforcement
authorities, that restrict our ability to operate our business or
subject us to fines, penalties or other legal liability;
-- Changes in tax law and accounting standards that impact the tax rate
applicable to us, the jurisdictions in which profits are determined to
be earned and taxed, adverse resolution of tax audits, increases in
tariff rates, and the ability to realize deferred tax assets;
-- Financial difficulties of our distributors or semiconductor
distributors' promotion of competing product lines to our detriment; or
disputes with current or former distributors;
-- Losses or curtailments of purchases from key customers or the timing and
amount of customer inventory adjustments;
-- Our ability to maintain or improve profit margins, including our ability
to utilize our manufacturing facilities at sufficient levels to cover
our fixed operating costs, in an intensely competitive and cyclical
industry and changing regulatory environment;
-- Our ability to maintain and enforce a strong intellectual property
portfolio and maintain freedom of operation in all jurisdictions where
we conduct business; or our exposure to infringement claims;
-- Instability in the global credit and financial markets; and
-- Impairments of our non-financial assets.
For a more detailed discussion of these factors, see the Risk factors discussion in Item 1A of TI's most recent Form 10-K. The forward-looking statements included in this release are made only as of the date of this release, and we undertake no obligation to update the forward-looking statements to reflect subsequent events or circumstances. If we do update any forward-looking statement, you should not infer that we will make additional updates with respect to that statement or any other forward-looking statement.
About Texas Instruments
Texas Instruments Incorporated (Nasdaq: TXN) is a global semiconductor company that designs, manufactures, tests and sells analog and embedded processing chips for markets such as industrial, automotive, personal electronics, communications equipment and enterprise systems. Our passion to create a better world by making electronics more affordable through semiconductors is alive today, as each generation of innovation builds upon the last to make our technology smaller, more efficient, more reliable and more affordable - making it possible for semiconductors to go into electronics everywhere. We think of this as Engineering Progress. It's what we do and have been doing for decades. Learn more at TI.com.
TXN-G
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SOURCE Texas Instruments Incorporated
