Texas Instruments, Messy (TXN)

Texas Instruments Inc. (NYSE:TXN) has posted its earnings at $0.52 EPS on revenues of $3.66 Billion; First Call had estimates pegged at $0.50 EPS and $3.66 Billion in revenues.  Unfortunately, the results included a gain of $0.02 from the sale of the company’s semiconductor product line for broadband DSL customer-premises equipment that was included in the company’s most recent business outlook issued September 11, 2007.  So this looks right in-line with the month-ago levels indicated.  Guidance is also tame: EPS guidance is $0.48 to $0.54 and Revenue guidance was put at $3.4 to $3.68 Billion for the next quarter, and First Call has estimates of $0.50 and $3.71 Billion.  That number might not generate much excitement, at best.

The company did live up to that monster stock buyback plan.  Rich Templeton, president and CEO stated, "Our growth allows us to continue to increase our return to shareholders. In the third quarter, we repurchased $1.4 billion of our stock. In September, our Board authorized an additional $5 billion in repurchases, and we announced a 25 percent increase in the dividend."

TI orders were $3.55 billion. This was an increase of $103 million from the prior quarter as higher demand for semiconductor products more than offset a seasonal decline in orders for graphing calculator products. Orders were up $125 million from the year-ago quarter due to higher demand for semiconductor products.

Cash flow from operations was $1.53 billion. Total cash and equivalents was $3.67 billion at the end of the third quarter.   The total buyback was 41.41 Billion in the quarter for 40 million shares of stock.  Since the end of the year-ago quarter, the company has used $4.14 billion to repurchase 127 million shares of common stock and paid $346 million in dividends.  Accounts receivable were $2.02 billion at the end of the quarter; and days sales outstanding were 50 at the end of the third quarter, unchanged from the end of the prior quarter and the year-ago quarter.

Inventory was $1.45 billion at the end of the third quarter. This was an increase of $26 million from the prior quarter. Compared with a year ago, inventory decreased $41 million. Days of inventory at the end of the third quarter were 78, unchanged from the end of the prior quarter and up from 73 a year ago.

Shares closed up 1% at $34.27 on the day but shares are down almost 3% in after-hours at $33.25.  The 52-week trading range is $28.24 to $39.63.

Jon C. Ogg
October 22, 2007