Texas Instruments Rises on Solid Earnings

Texas Instruments Inc. (NASDAQ: TXN) reported fourth-quarter financial results after the markets closed on Thursday. The company had $0.80 in earnings per share (EPS) on $3.19 billion in revenue, compared to consensus estimates from Thomson Reuters that called for $0.69 in EPS on $3.20 billion in revenue. The same period from the previous year had $0.76 in EPS on $3.27 billion in revenue.

The combined core businesses of Analog and Embedded Processing performed well in the quarter and comprised 87% of fourth-quarter revenue.

Over the course of the quarter the company returned $4.2 billion to shareholders over the past 12 months through stock repurchases and dividends.

In terms of guidance, TI’s first-quarter outlook calls for revenue in the range of $2.85 billion to $3.09 billion, and earnings per share between $0.57 and $0.67. This outlook includes about a $150 million decline in revenue from a year ago within a sector of the personal electronics market. Aside from this, overall expectations are about even with the first quarter of 2015. There are consensus estimates that call for $0.64 in EPS on $3.12 billion in revenue.

Rich Templeton, TI’s chairman, president and CEO, commented:

Revenue declined 2% from a year ago and was in line with our expectations, even though we experienced slowing demand within a sector of the personal electronics market late in the quarter.

Our cash flow from operations once again underscored the strength of our business model. Free cash flow for the trailing 12 months was up 6% from a year ago to $3.7 billion. This represents 28.6% of revenue, up from 26.9% a year ago, and is consistent with our targeted range of 20%-30% of revenue.

[recirclink id=311036]
On the books, cash and short-term investments totaled $3.2 billion at the end of the quarter, 82% of which was owned by the company’s U.S. entities.

Shares of Texas Instruments closed Wednesday at $50.67, with a consensus analyst price target of $58.47 and a 52-week trading range of $43.49 to $59.99. Following the release of the earnings report, the stock was up 1% at $51.16 in the after-hours trading session.