8-KOther Events

TEXAS INSTRUMENTS INC 8-K Report (Aug 14, 2001)

Filed August 14, 2001For Securities:TXN

Summary

Texas Instruments Incorporated (TXN) filed an 8-K on August 13, 2001, to confirm its previously issued outlook for the third quarter of 2001, as detailed in its Form 10-Q filed on July 27, 2001. The company anticipates a sequential revenue decline of 10% to 15% for the third quarter, attributing this to continued inventory reductions by semiconductor customers amidst weak overall demand. Key projections for Q3 2001 include a slight increase in wireless semiconductor revenue, offset by declines in other semiconductor segments. Non-semiconductor revenue is expected to rise due to seasonal factors in educational calculators, though this will be tempered by seasonal decreases in Sensors & Controls. The company foresees a sequential decline in operating margin and non-operating income, leading to an expected loss per share (before special charges and amortization) of a few cents. For the full year 2001, R&D spending is projected to remain flat, while capital expenditures are reduced.

Key Highlights

  • 1Confirms Q3 2001 outlook previously provided in Form 10-Q.
  • 2Expects Q3 2001 revenue to decline 10% to 15% sequentially due to customer inventory adjustments and weak demand.
  • 3Wireless semiconductor revenue to see a slight sequential increase in Q3, but other semiconductor segments will decline.
  • 4Non-semiconductor revenue projected to increase sequentially, driven by educational calculators, partially offset by Sensors & Controls.
  • 5Operating margin expected to decline sequentially in Q3 due to lower revenue.
  • 6Full-year 2001 R&D spending unchanged at $1.6 billion; capital expenditures revised down to $1.8 billion.
  • 7Anticipates Q3 2001 earnings per share to be a loss of a few cents before special items.

Frequently Asked Questions

Texas Instruments expects a sequential revenue decline of 10% to 15% in the third quarter of 2001 primarily because many of its semiconductor customers are continuing to reduce their inventories. This is occurring in an environment where demand for their own end products is weak.

In the Semiconductor segment, wireless revenue is expected to increase slightly, but this will be more than offset by declines in other semiconductor product areas. The Non-Semiconductor segment is projected to see sequential revenue growth, driven by seasonal sales of educational calculators, which will outweigh seasonal declines in Sensors & Controls.

The company expects the operating margin to decline sequentially by about 10 percentage points (before special charges and amortization) due to the anticipated lower revenue. Non-operating income is also projected to decrease to approximately $20 million due to reduced interest income. Consequently, earnings per share are expected to be a loss of a few cents before special charges and amortization.

For the full year 2001, R&D expenses are expected to remain unchanged at $1.6 billion (excluding acquisition-related amortization and purchased in-process R&D), consistent with the prior estimate and the previous year. Capital expenditures are also unchanged from the prior estimate at $1.8 billion, representing a significant decrease of 35% from the previous year.