10-QPeriod: Q1 FY2019

TEXAS INSTRUMENTS INC Quarterly Report for Q1 Ended Mar 31, 2019

Filed April 30, 2019For Securities:TXN

Summary

Texas Instruments (TXN) reported its first quarter 2019 results, showing a year-over-year revenue decrease of 5% to $3.59 billion. This decline was primarily driven by lower demand across most markets, though strength in communications equipment provided some offset. Net income also fell to $1.22 billion, resulting in diluted Earnings Per Share (EPS) of $1.26, down from $1.35 in the prior year's quarter. Despite the revenue dip, the company highlighted the continued strength of its business model, evidenced by robust cash flow from operations and significant free cash flow generation. Management emphasized its strategy of returning free cash flow to shareholders through dividends and share repurchases, with $8.0 billion returned in the trailing twelve months.

Financial Highlights

52 data points
Beta

Revenue

$3.59B

62.9% Gross Margin

Net Income

$1.22B

33.9% Net Margin

EPS (Diluted)

$1.26

Total Assets

$17.44B

Cash & Equivalents

$3.72B

Free Cash Flow

$856.00M

Financial Statements
Beta
Revenue$3.59B
Cost of Revenue$1.33B
Gross Profit$2.26B
R&D Expenses$389.00M
SG&A Expenses$414.00M
Operating Income$1.38B
Net Income$1.22B
EPS (Basic)$1.29
EPS (Diluted)$1.26
Shares Outstanding (Basic)939.00M
Shares Outstanding (Diluted)956.00M

Key Highlights

  • 1Revenue for the first quarter of 2019 was $3.59 billion, a 5% decrease compared to the same period in 2018, attributed to slowing demand across most markets.
  • 2Net income decreased to $1.22 billion from $1.37 billion in the prior year, with diluted EPS falling to $1.26 from $1.35.
  • 3Analog segment revenue saw a 2% decline, while Embedded Processing revenue experienced a significant 14% drop.
  • 4Despite the revenue decrease, cash flow from operations remained strong at $1.11 billion for the quarter, and free cash flow for the trailing twelve months was $6.0 billion.
  • 5The company returned $8.0 billion to shareholders through dividends and stock repurchases in the past 12 months, reflecting its commitment to capital return.
  • 6Total cash and cash equivalents, including short-term investments, stood at $4.09 billion at the end of the quarter.
  • 7The company issued $750 million in new long-term debt in the first quarter of 2019.

Frequently Asked Questions

The primary driver for the 5% revenue decrease in Q1 2019 was a slowdown in demand for Texas Instruments' products across most of its key markets. While there was some strength in communications equipment, it was not enough to offset the broader market weakness.

Texas Instruments generated strong cash flow from operations ($1.11 billion in Q1 2019) and a significant free cash flow of $6.0 billion over the trailing twelve months. The company's strategy is to return all of its free cash flow to shareholders through a combination of dividends and share repurchases. In the past 12 months, they returned $8.0 billion to shareholders.

In the first quarter of 2019, both of Texas Instruments' core segments experienced declines. Analog segment revenue decreased by 2%, while the Embedded Processing segment saw a more substantial 14% decline in revenue compared to the prior year's quarter.

Yes, Texas Instruments issued $750 million in new fixed-rate, long-term debt in the first quarter of 2019, maturing in 2039. This contributed to an increase in their total long-term debt.