TI reports 3Q16 financial results and shareholder returns, including 32% dividend increase

Conference call on TI website at 4:30 p.m. Central time today

DALLAS, Oct. 26, 2016 — (PRNewswire) —  Texas Instruments Incorporated (TI) (NASDAQ: TXN) today reported third-quarter revenue of $3.68 billion, net income of $968 million and earnings per share of 94 cents.

TI also increased its quarterly dividend by 32 percent to 50 cents per share, or $2.00 annualized. The increase reflects TI's continued strength in free cash flow generation and its commitment to return excess cash to shareholders. The quarterly dividend was declared and will be payable November 21, 2016, to shareholders of record on November 7, 2016. 

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

  • "Revenue and earnings per share for the quarter were slightly above our expected range. Compared with a year ago, demand for our products continued to be strong in the automotive market and improved in the industrial market. Demand in the personal electronics market was about even with a year ago.
  • "In our core businesses, Embedded Processing revenue grew 10 percent and Analog revenue grew 6 percent from the same quarter a year ago. Operating margin increased in both businesses.
  • "Gross margin of 62.0 percent reflected 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 of $4.5 billion for the trailing 12 months again underscored the strength of our business model. Free cash flow for the trailing 12 months was up 8 percent from a year ago to $3.9 billion, and represents 29.5 percent of revenue, up from 27.5 percent a year ago.
  • "We have returned $3.8 billion to shareholders in the past 12 months through stock repurchases and dividends, consistent with our strategy to return to shareholders all of our free cash flow plus proceeds from exercises of equity compensation minus net debt retirement.
  • "Our balance sheet remains strong with $3.1 billion of cash and short-term investments at the end of the quarter, about 80 percent of which was owned by the company's U.S. entities. Inventory ended the quarter at 117 days.
  • "TI's fourth-quarter outlook is for revenue in the range of $3.17 billion to $3.43 billion, and earnings per share between 76 and 86 cents. For 2016, TI's annual effective tax rate is expected to be about 30 percent, unchanged from previous guidance."

Free cash flow is a non-GAAP financial measure. Free cash flow is cash flow from operations less capital expenditures.

Earnings summary

Amounts are in millions of dollars, except per-share amounts. 



3Q16


3Q15


Change

Revenue


$   3,675


$   3,429


7%

Operating profit


$   1,395


$   1,164


20%

Net income


$      968


$      798


21%

Earnings per share


$     0.94


$     0.76


24%

 

Cash generation

Amounts are in millions of dollars.





Trailing 12 Months




3Q16


3Q16


3Q15


Change


Cash flow from operations


$   1,413


$   4,459


$   4,110


8%


Capital expenditures


$      139


$      585


$      512


14%


Free cash flow


$   1,274


$   3,874


$   3,598


8%


Free cash flow % of revenue




29.5%


27.5%





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