Semiconductor Value Chain

TI's Sales Up 8 Percent in Q2

22 July 2014

Texas Instruments Inc. released its second-quarter earnings of $3.29 billion with a net income of $683 million on the back of strong analog and embedded processing semiconductor sales.

According to TI, revenue was in the middle range of the company’s expectations while earnings were near the top of the range, growing 62 cents in the quarter. Overall, TI’s year-over-year revenue growth was 8 percent with the analog and embedded processing portfolio comprising 82 percent of second quarter revenue, up 4 points from a year ago.

While TI’s overall growth was 8 percent, analog and embedded processing grew at 14 percent from a year ago. Analog’s growth was mainly due to expansion in the power management field while embedded processing growth came from processor and microcontroller growth. Connectivity also grew at a faster rate for TI in the second quarter but it was coming a much smaller base, the company said.

“Embedded processing delivered its seventh quarter in a row of year-over-year growth as our investments over the past few years in strategic areas is having favorable results,” said Dave Pahl, vice president of investor relations at TI. He added the company as a whole continues to benefit from the industrial and automotive investments it made over the last few years “as these important markets continue to grow as a percentage of our total revenue.”

TI chairman, president and CEO Rich Templeton said in a statement that the outlook for TI’s third quarter for revenue is “in the range of $3.31 billion to $3.59 billion” with earnings per share between $0.66 and $0.76. He noted that TI’s business model strength “is reflected in our generation of cash flow from operations.” TI’s free cash flow for the trailing 12-month period was up 10 percent from a year ago to $3.2 billion, or 25 percent of revenue. This is on target for what the company hopes to achieve, Templeton added.

TI said that at the end of the second quarter it had $2.8 billion in cash and short-term investments, 82 percent of which was owned by the company and its U.S. entities. Inventory days, meanwhile, was 111 days, consistent with TI’s business model of 105 to 115 days.

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