TI reports financial results for 4Q09 and 2009
Conference call on TI web site at 4:30 p.m. Central time today www.ti.com/ir
DALLAS, Jan. 25 /PRNewswire-FirstCall/ --
Texas Instruments Incorporated (TI) (NYSE:TXN) today announced fourth-quarter revenue of $3.00 billion, net income of $655 million and earnings per share (EPS) of $0.52
"TI's growth and improving performance reflect our focus on Analog and Embedded Processing. These are large, diverse businesses that give us access to the world's fastest-growing electronics markets," said Rich Templeton, TI chairman, president and chief executive officer
"In the fourth quarter, demand was strong across end markets without the usual holiday slowdown. Throughout, we believe customer and channel inventories have been lean. With demand continuing to be solid and inventories well below historical levels, our outlook for the first quarter reflects the likelihood of sequential growth instead of the typical seasonal decline
"We continue to make investments to support customers and drive growth, including the ramp-up of the industry's first 300-millimeter analog factory in Richardson, Texas," Templeton concluded
4Q09 financial summary
Amounts are in millions of dollars, except per-share amounts
4Q09 4Q08 vs. 4Q08 3Q09 vs. 3Q09 ------ ------ -------- ----- -------- Revenue: $ 3,005 $ 2,491 21% $ 2,880 4% Operating profit: $ 875 $ 51 1,616% $ 763 15% Net income: $ 655 $ 107 512% $ 538 22% Earnings per share: $ 0.52 $ 0.08 550% $ 0.42 24% Cash flow from operations: $ 1,000 $ 1,113 -10% $ 834 20%
TI's operating profit increased compared with the fourth quarter of 2008 and the prior quarter primarily due to higher gross profit, which included the impact of higher revenue and the benefit associated with higher utilization of manufacturing assets. In addition, restructuring charges were lower compared with a year ago
4Q09 segment results
4Q09 4Q08 vs. 4Q08 3Q09 vs. 3Q09 Note ---- ---- -------- ---- -------- ---- Analog: Revenue $1,289 $1,015 27% $1,184 9% (1) Operating profit $ 386 $ 78 395% $ 306 26% Embedded Processing: Revenue $ 412 $ 340 21% $ 393 5% (2) Operating profit (loss) $ 89 $ (2) n/a $ 75 19% Wireless: Revenue $ 732 $ 646 13% $ 675 8% (3) Operating profit (loss) $ 178 $ (87) n/a $ 110 62% Other: Revenue $ 572 $ 490 17% $ 628 -9% (4) Operating profit $ 222 $ 62 258% $ 272 -18%
The product categories in each segment are as follows: -- Analog: high-volume analog & logic, high-performance analog (includes data converters, amplifiers and interface products) and power management -- Embedded Processing: DSPs and microcontrollers used in catalog, communications infrastructure and automotive applications -- Wireless: DSPs and analog used in basebands for handsets, OMAP(TM) applications processors and connectivity products for wireless applications -- Other: includes DLP® products, calculators, ASIC products, RISC microprocessors and royalties
(1) The increase in Analog revenue from a year ago and from the prior quarter was primarily due to a combination of strength in power management and high-volume analog & logic. High-performance analog revenue also increased, but to a lesser extent. The gains in operating profit for this segment, both from a year ago and sequentially, were primarily due to higher gross profit
(2) The increase in Embedded Processing revenue from a year ago and from the prior quarter was primarily due to a combination of higher catalog and automotive product revenue. Revenue from communications infrastructure products also increased, but to a lesser extent
The gains in operating profit for this segment, both from a year ago and sequentially, were primarily due to higher gross profit
(3) The increase in Wireless revenue from a year ago and from the prior quarter was primarily due to strength in connectivity products and applications processors. Baseband product revenue was about even with the year-ago quarter and increased sequentially. Operating profit in this segment increased from a year ago primarily due to the combination of lower restructuring charges and higher gross profit, and increased from the prior quarter primarily due to higher gross profit
(4) Other revenue increased from a year ago due to gains in DLP products, royalties and calculators. Revenue from RISC microprocessors declined from a year ago. Revenue in this segment decreased from the prior quarter due to the seasonal decline in calculator revenue. This was partially offset as revenue from DLP products and ASIC products increased. Operating profit in this segment increased from a year ago primarily due to higher gross profit and declined from the prior quarter due to seasonally lower gross profit
Restructuring charges were as follows:
4Q09 4Q08 3Q09 ---- ---- ---- Analog: $ 6 $ 60 $ 4 Embedded Processing: $ 3 $ 24 $ 2 Wireless: $ 1 $ 130 $ 3 Other: $ 2 $ 40 $ 1 Total: $ 12 $ 254 $ 10
4Q09 additional financial information
-- Net income included $16 million in discrete tax benefits
-- Orders were $3.26 billion, up 75 percent from a year ago and up 5 percent from the prior quarter
-- Inventory was $1.20 billion at the end of the quarter, down $173 million from a year ago and up $86 million from the prior quarter
-- Capital expenditures were $436 million in the quarter compared with $76 million a year ago and $226 million in the prior quarter. Capital expenditures in the quarter included the purchase of 300-millimeter wafer manufacturing equipment as part of Qimonda AG's bankruptcy proceedings, as well as additional assembly/test manufacturing equipment
-- The company used $351 million in the quarter to repurchase 14.8 million shares of its common stock and paid dividends of $149 million
Year 2009 financial summary
2009 2008 vs. 2008 ---- ---- -------- Revenue: $ 10,427 $ 12,501 -17% Operating profit: $ 1,991 $ 2,437 -18% Net income: $ 1,470 $ 1,920 -23% Earnings per share: $ 1.15 $ 1.44 -20% Cash flow from operations: $ 2,643 $ 3,330 -21%
TI's operating profit decreased 18 percent in 2009 due to lower revenue. The impact of lower revenue was partially offset by reductions in operating expenses. Operating profit included the negative impact of $212 million in restructuring charges, which were down $42 million from 2008
Year 2009 segment results
2009 2008 vs. 2008 Note ---- ---- -------- ---- Analog: Revenue $ 4,270 $ 4,857 -12% (1) Operating profit $ 753 $ 1,050 -28% Embedded Processing: Revenue $ 1,471 $ 1,631 -10% (2) Operating profit $ 194 $ 268 -28% Wireless: Revenue $ 2,558 $ 3,383 -24% (3) Operating profit $ 332 $ 347 -4% Other: Revenue $ 2,128 $ 2,630 -19% (4) Operating profit $ 712 $ 772 -8%
(1) Analog revenue declined primarily due to lower high-volume analog & logic revenue
(2) Embedded Processing revenue declined primarily due to lower catalog product revenue
(3) Wireless revenue declined due to lower baseband revenue
(4) Other revenue declined across a broad range of products, especially RISC microprocessors
Restructuring charges negatively impacted each segment's operating profit as follows:
2009 2008 ---- ---- Analog: $ 87 $ 60 Embedded Processing: $ 43 $ 24 Wireless: $ 59 $ 130 Other: $ 23 $ 40 Total: $ 212 $ 254
2009 additional financial information
-- Capital expenditures were $753 million in 2009, down $10 million from 2008
-- The company used $954 million to repurchase 45.3 million shares of its common stock and paid dividends of $567 million
Outlook
For the first quarter of 2010, TI expects:
-- Revenue: $2.95 - 3.19 billion -- Earnings per share: $0.44 - 0.52
TI will update its first-quarter outlook on March 8, 2010
For the full year of 2010, TI expects approximately the following:
-- R&D expense: $1.5 billion -- Capital expenditures: $0.9 billion -- Depreciation: $0.9 billion -- Annual effective tax rate: 31%
The tax rate estimate is based on current tax law and does not assume reinstatement of the federal R&D tax credit, which expired at the end of 2009
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