TI reports 4Q17 and 2017 financial results and shareholder returns

Conference call on TI website at 3:30 p.m. Central time today

DALLAS, Jan. 23, 2018 — (PRNewswire) — Texas Instruments Incorporated (TI) (NASDAQ: TXN) today reported fourth-quarter revenue of $3.75 billion, net income of $344 million and earnings per share of 34 cents. Earnings per share include 75 cents in tax-related expenses not in the company's original guidance primarily due to the recently passed tax reform act.

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

  • "Revenue increased 10 percent from the same quarter a year ago. Demand for our products continued to be strong in the industrial and automotive markets.
  • "In our core businesses, Analog revenue grew 11 percent and Embedded Processing grew 20 percent from the same quarter a year ago. Operating margin increased in both businesses.
  • "Gross margin of 65.1 percent for the 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 $5.36 billion for the year again underscored the strength of our business model. Free cash flow for the year was up 14 percent from a year ago to $4.67 billion and represents 31.2 percent of revenue, up from 30.5 percent a year ago.
  • "We have returned $4.66 billion to owners in 2017 through stock repurchases and dividends, consistent with our strategy to return to owners all of our free cash flow. Over the last 12 months, our dividends represented 45 percent of free cash flow, underscoring their sustainability.
  • "TI's first-quarter outlook is for revenue in the range of $3.49 billion to $3.79 billion, and earnings per share between $1.01 and $1.17, which includes an estimated $30 million discrete tax benefit.
  • "Notably, the recently passed tax reform act will reduce our annual operating tax rate from 31 percent in 2017 to an ongoing rate of 18 percent starting in 2019, comprehending the benefit of exports and having manufacturing, R&D and intellectual property in the United States. In 2018, our annual operating tax rate will be 23 percent, 5 percentage points higher, due to transitional expense associated with the reduced U.S. tax rate in 2018."

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

Certain amounts in the prior periods have been recast to conform to the current presentation.

Earnings summary

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



4Q17


4Q16


Change

Revenue

$

3,750

$

3,414


10%

Operating profit

$

1,563

$

1,332


17%

Net income

$

344

$

1,047


-67%

Earnings per share

$

0.34

$

1.02


-67%

 

Cash generation

Amounts are in millions of dollars.






Trailing 12 Months




4Q17



4Q17



4Q16


Change

Cash flow from operations


$

1,929


$

5,363


$

4,614


16%

Capital expenditures


$

231


$

695


$

531


31%

Free cash flow


$

1,698


$

4,668


$

4,083


14%

Free cash flow % of revenue






31.2%



30.5%




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