• Revenue: $4.2 billion, up 9% sequentially, down 8% year-over-year.

• Analog Revenue: Declined 4% year-over-year.

• Embedded Processing Revenue: Declined 27% year-over-year.

• Gross Profit: $2.5 billion, 60% of revenue.

• Gross Profit Margin: Increased 180 basis points sequentially.

• Operating Expenses: $920 million, flat from a year ago.

• Operating Profit: $1.6 billion, 37% of revenue, down 18% year-over-year.

• Net Income: $1.4 billion, $1.47 per share.

• Cash Flow from Operations: $1.7 billion in the quarter, $6.2 billion trailing 12-month basis.

• Capital Expenditures: $1.3 billion in the quarter, $4.8 billion trailing 12-month basis.

• Free Cash Flow: $1.5 billion trailing 12-month basis.

• Dividends Paid: $1.2 billion in the quarter.

• Stock Repurchases: $380 million in the quarter.

• Cash and Short-term Investments: $8.8 billion at the end of the third quarter.

• Total Debt Outstanding: $14 billion, with a weighted average coupon of 3.8%.

• Inventory: $4.3 billion, up $190 million from the prior quarter.

• Fourth Quarter Revenue Guidance: $3.7 billion to $4 billion.

• Fourth Quarter EPS Guidance: $1.07 to $1.29.

• Warning! GuruFocus has detected 10 Warning Signs with TXN.

Release Date: October 22, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Texas Instruments Inc (NASDAQ:TXN) reported third-quarter revenue of $4.2 billion, which was in line with expectations and represented a 9% sequential increase.

• The automotive market showed strong growth, particularly in China, with revenue increasing by upper single digits.

• Personal electronics, enterprise systems, and communication equipment markets experienced significant sequential growth, indicating a cyclical recovery.

• The company announced a 5% increase in dividends, marking the 21st consecutive year of dividend increases, reflecting a commitment to returning free cash flow to shareholders.

• Texas Instruments Inc (NASDAQ:TXN) maintains a strong balance sheet with $8.8 billion in cash and short-term investments, supporting its financial stability and future investments.

Negative Points

• Year-over-year revenue declined by 8%, with analog revenue down 4% and embedded processing down 27%, indicating challenges in these segments.

• The industrial market experienced a decline as customers continued to reduce inventory levels, impacting overall performance.

• Operating profit decreased by 18% from the year-ago quarter, reflecting pressure on profitability.

• Inventory levels increased to $4.3 billion, raising concerns about potential overstocking amid uncertain demand.

• Guidance for the fourth quarter indicates a potential revenue decline, with expectations set between $3.7 billion to $4 billion, suggesting continued market challenges.