Texas Instruments Q4 profit soars 260%, beats estimates

Texas Instruments (TXN) reported a 260% jump in earnings for the fourth quarter helped by the management of costs and expenses, and lower income taxes provision. The bottom line exceeded analysts’ expectations while the top line missed consensus estimates.

Net income for the quarter soared 260% to $1.24 billion and earnings jumped 274% to $1.27 per share. Revenue declined 1% to $3.72 billion as demand for its products continued to slow across most markets.

Looking ahead into the first quarter, the company expects revenue in the range of $3.34 billion to $3.62 billion and earnings in the range of $1.03 to $1.21 per share, which includes an estimated $20 million discrete tax benefits. For 2019, the company’s annual operating tax rate is expected to be about 16%.

In core businesses, Analog revenue for the fourth quarter grew 4% year-over-year helped by Signal Chain and Power despite a decline in High Volume. Embedded Processing revenue declined 12% from the same quarter a year ago due to lower demand for Processors and Connected Microcontrollers.

On January 17, Texas Instruments said its board of directors declared a quarterly cash dividend of $0.77 per share of common stock. The dividend is payable on February 11, 2019, to stockholders of record on January 31, 2019.

In 2018, the company has returned $7.7 billion to owners through stock repurchases and dividends. Over the last 12 months, dividends represented 42% of free cash flow, emphasizing their sustainability. The company remained consistent in returning to owners all of its free cash flow.

Texas Instruments Q3 profit jumps 22%, beats estimates

Cash flow from operations of $7.2 billion for the year underscored the strength of the business model. Free cash flow for the year was $6.1 billion, or 38.4% of revenue. This reflects the quality of the product portfolio, as well as the efficiency of the manufacturing strategy, including the benefit of 300-millimeter Analog production.

Shares of Texas Instruments ended Wednesday’s regular session down 1.17% at $95.49 on the Nasdaq. Following the earnings announcement, the stock inched up 0.73% in the after-market session.

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