Summary
Texas Instruments Inc. (TXN) reported a significant year-over-year decline in revenue and net income for the first quarter of 2024. Revenue fell 16% to $3.66 billion, and net income dropped to $1.11 billion from $1.71 billion in the prior year period. This downturn was primarily driven by decreased demand across all end markets, impacting both the Analog and Embedded Processing segments. Despite the revenue decline, the company's core strategy remains focused on long-term free cash flow per share growth, underpinned by its competitive advantages in manufacturing, product portfolio, market reach, and diversity. While the current quarter shows a challenging demand environment, TXN highlighted its ongoing investments in R&D and capital expenditures, particularly in expanding its 300mm manufacturing capacity, supported by the U.S. CHIPS and Science Act. The company's liquidity remains strong, with substantial cash and short-term investments. However, the reported decrease in free cash flow for the trailing twelve months, coupled with increased long-term debt and inventory levels, warrants investor attention. Management attributes the revenue decrease to lower shipment volumes and is managing costs to mitigate the impact on profit margins.
Financial Highlights
52 data points| Revenue | $3.66B |
| Cost of Revenue | $1.57B |
| Gross Profit | $2.10B |
| R&D Expenses | $478.00M |
| SG&A Expenses | $455.00M |
| Operating Income | $1.29B |
| Net Income | $1.10B |
| EPS (Basic) | $1.21 |
| EPS (Diluted) | $1.20 |
| Shares Outstanding (Basic) | 910.00M |
| Shares Outstanding (Diluted) | 917.00M |
Key Highlights
- 1Revenue for the first quarter of 2024 decreased by 16% to $3.66 billion compared to $4.38 billion in the first quarter of 2023.
- 2Net income for the quarter was $1.11 billion, a decrease from $1.71 billion in the prior year period, resulting in diluted EPS of $1.20 compared to $1.85.
- 3Gross profit margin declined to 57.2% from 65.4% year-over-year, impacted by lower revenue and increased manufacturing costs due to reduced factory utilization and capacity expansions.
- 4The Analog segment, representing the largest portion of revenue, saw a 14% decrease in revenue, while Embedded Processing revenue declined by 22%.
- 5The company issued $3.00 billion in senior unsecured notes in February 2024, increasing its long-term debt.
- 6Cash flow from operations for the trailing twelve months decreased to $6.28 billion from $7.74 billion, and free cash flow significantly reduced to $940 million from $4.40 billion.
- 7Inventories increased by $84 million to $4.08 billion, and days of inventory rose to 235 days from 219 days year-over-year.