TI reports 4Q16 and 2016 financial results and shareholder returns

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

(PRNewswire) —  Texas Instruments Incorporated (TI) (NASDAQ: TXN) today reported fourth-quarter revenue of $3.41 billion, net income of $1.05 billion and earnings per share of $1.02. Earnings per share include a 14-cent benefit for items that were not in the company's original guidance for the quarter.

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

  • "Revenue increased 7 percent from the same quarter a year ago, as demand for our products remained strong in the automotive market. The improvement we saw in the third quarter for the industrial market continued. Demand in the personal electronics market was down slightly from a year ago.
  • "In our core businesses, Analog revenue grew 10 percent and Embedded Processing grew 6 percent from the same quarter a year ago. Operating margin increased in both businesses.
  • "Gross margin of 62.5 percent in the fourth quarter 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 $4.6 billion for the year again underscored the strength of our business model. Free cash flow for the year was up 6 percent from a year ago to $4.1 billion, and represents 30.5 percent of revenue, up from 29.6 percent a year ago.
  • "We have returned $3.8 billion to owners in 2016 through stock repurchases and dividends, consistent with our strategy to return all of our free cash flow plus proceeds from exercises of equity compensation minus net debt retirement. Over the last 12 months, our dividends represented 40 percent of free cash flow, underscoring their sustainability.
  • "Our balance sheet remains strong with $3.5 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 126 days.
  • "TI's first-quarter outlook is for revenue in the range of $3.17 billion to $3.43 billion and earnings per share between 78 and 88 cents, which includes a 4-cent estimated tax benefit related to the new accounting standard for stock compensation. For 2017, TI's annual effective tax rate is expected to be about 30 percent."

As noted in the first paragraph above, earnings per share for fourth-quarter 2016 include a 14-cent benefit for items not in the company's prior outlook: a 14-cent benefit for several intellectual property agreements, a 1-cent tax benefit related to the adoption of an accounting standard for stock compensation and a 1-cent restructuring charge.

Also today, TI said Brian Crutcher has been promoted to chief operating officer. Crutcher, 44, is a 21-year veteran of the company and has been executive vice president responsible for all business and sales operations, as well as for Kilby Labs and information technology. As COO, he adds oversight of TI's global technology and manufacturing operations to his current duties.

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. 




4Q16



4Q15


Change

Revenue


$

3,414


$

3,189


7%

Operating profit


$

1,319


$

1,142


15%

Net income


$

1,047


$

836


25%

Earnings per share


$

1.02


$

0.80


28%

 

Cash generation

Amounts are in millions of dollars.






Trailing 12 Months




4Q16



4Q16



4Q15


Change

Cash flow from operations


$

1,387


$

4,614


$

4,397


5%

Capital expenditures


$

110


$

531


$

551


-4%

Free cash flow


$

1,277


$

4,083


$

3,846


6%

Free cash flow % of revenue






30.5%



29.6%




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