Summary
Texas Instruments Inc. (TXN) reported its third-quarter 2023 financial results, indicating a challenging period characterized by declining revenues and profitability compared to the previous year. Revenue for the quarter was $4.53 billion, a 14% decrease year-over-year, primarily driven by a significant drop in the Analog segment, though partially offset by growth in Embedded Processing. Gross profit margin compressed to 62.1% from 69.0% in the prior year, reflecting lower revenue and increased manufacturing costs associated with capacity expansion and reduced factory utilization. Despite the top-line decline, TXN continued to invest in its long-term competitive advantages, leading to a rise in operating expenses. Net income for the quarter was $1.71 billion, down from $2.30 billion year-over-year, resulting in diluted Earnings Per Share (EPS) of $1.85, a decrease from $2.47. The company emphasized its commitment to maximizing long-term free cash flow per share, supported by its business model and four sustainable competitive advantages. While capital expenditures increased significantly, the company maintained its dividend and continued share repurchases, albeit at a reduced pace compared to the prior year.
Financial Highlights
52 data points| Revenue | $4.53B |
| Cost of Revenue | $1.72B |
| Gross Profit | $2.81B |
| R&D Expenses | $471.00M |
| SG&A Expenses | $452.00M |
| Operating Income | $1.89B |
| Net Income | $1.71B |
| EPS (Basic) | $1.87 |
| EPS (Diluted) | $1.85 |
| Shares Outstanding (Basic) | 908.00M |
| Shares Outstanding (Diluted) | 916.00M |
Key Highlights
- 1Revenue for Q3 2023 was $4.53 billion, a 14% decrease compared to $5.24 billion in Q3 2022, largely due to a decline in the Analog segment.
- 2Net income for Q3 2023 was $1.71 billion, down from $2.30 billion in Q3 2022, with diluted EPS falling to $1.85 from $2.47.
- 3Gross profit margin decreased to 62.1% in Q3 2023 from 69.0% in Q3 2022, impacted by lower revenue and increased manufacturing costs.
- 4Operating expenses (R&D and SG&A) increased year-over-year due to investments in competitive advantages, specifically higher employee-related costs.
- 5The Analog segment saw a 16% revenue decrease, while Embedded Processing revenue grew by 8% year-over-year.
- 6Capital expenditures significantly increased to $3.92 billion in the first nine months of 2023 from $1.83 billion in the prior year, reflecting ongoing investments in manufacturing capacity.
- 7The company announced a 5% dividend increase in September 2023, marking 20 consecutive years of dividend increases, and continued to return capital to shareholders through dividends and share repurchases.