TEXAS INSTRUMENTS INC Quarterly Report for Q2 Ended Jun 30, 2018

Summary

Texas Instruments Inc. (TXN) reported a strong second quarter and first six months of 2018, demonstrating significant year-over-year growth in revenue, operating profit, and net income. Revenue increased by 9% for the quarter to $4.02 billion and 10% for the six-month period to $7.81 billion, driven by robust demand in the industrial and automotive markets for both its Analog and Embedded Processing segments. Key financial highlights include a substantial increase in earnings per share (EPS), with diluted EPS rising to $1.40 for the quarter and $2.75 for the six months. The company also showcased strong free cash flow generation of $5.7 billion over the trailing twelve months, underscoring its efficient manufacturing strategy and diversified product portfolio. TXN continued its commitment to shareholder returns, distributing $5.6 billion through stock repurchases and dividends over the same period, with dividends representing a sustainable 41% of free cash flow.

Key Highlights

• 1Revenue grew 9% year-over-year to $4.02 billion for the second quarter of 2018 and 10% to $7.81 billion for the first six months.
• 2Net income increased significantly to $1.41 billion for Q2 2018 and $2.77 billion for the first six months.
• 3Diluted EPS rose to $1.40 for Q2 2018 and $2.75 for the first six months, up from $1.03 and $2.00 respectively in the prior year.
• 4Operating profit margin improved to 42.6% in Q2 2018 and 41.8% year-to-date, reflecting strong operational efficiency.
• 5Free cash flow for the trailing twelve months reached $5.7 billion, representing 36.6% of revenue.
• 6The company returned $5.6 billion to shareholders via dividends and share repurchases in the last twelve months.
• 7Strong performance in both Analog and Embedded Processing segments, driven by demand in industrial and automotive markets.

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