TI reports 4Q14 and 2014 financial results and shareholder returns

Conference call on TI website at 4:30 p.m. Central time today

(PRNewswire) —  Texas Instruments Incorporated (TI) (NASDAQ: TXN) today reported fourth-quarter revenue of $3.27 billion, net income of $825 million and earnings per share of 76 cents.  Earnings per share included 7 cents for two items that were not in guidance for the quarter.

Regarding the company's performance and returns to shareholders, Rich Templeton, TI's chairman, president and CEO, made the following comments:

  • "Revenue growth of 8 percent year-over-year was consistent with our expectations, as were earnings per share, excluding the two items. Strength in both of these came from another quarter of strong execution. 
  • "Analog and Embedded Processing drove revenue growth in the quarter, and combined, they comprised 85 percent of fourth-quarter revenue.
  • "Gross margin of 58.0 percent reflects the diversity and longevity of our product portfolio, as well as the efficiency of our manufacturing strategy. 
  • "Our cash flow from operations once again underscores the strength of our business model.  Free cash flow for the year was up 18 percent from a year ago to $3.5 billion or 27 percent of revenue.  This represents an increase of 3 percentage points from a year ago and is consistent with our targeted range of 20-30 percent of revenue. 
  • "We returned $4.2 billion to shareholders in the year through stock repurchases and dividends.    
  • "Our strategy to return to shareholders 100 percent of free cash flow plus proceeds from exercises of equity compensation minus net debt retirement reflects our confidence in the long-term sustainability of our business model.
  • "Our balance sheet remains strong, with $3.5 billion of cash and short-term investments at the end of the quarter, 82 percent of which was owned by the company's U.S. entities.  Inventory ended the quarter at 117 days.  
  • "TI's outlook for the first quarter of 2015 is for revenue in the range of $3.07 billion to $3.33 billion and earnings per share between $0.57 and $0.67.  At the midpoint of our range, revenue would increase 7 percent from the year-ago quarter.  The annual effective tax rate for 2015 is expected to be about 30 percent, which does not assume the reinstatement of the R&D tax credit."

Free cash flow is a non-GAAP financial measure.  Free cash flow is cash flow from operations less capital expenditures.

Earnings summary

Amounts are in millions of dollars, except per-share amounts. 







 4Q14

 4Q13

Change


Revenue

$ 3,269

$ 3,028

8%


Operating profit

$ 1,100

$    687

60%


Net income

$    825

$    511

61%


Earnings per share

$   0.76

$   0.46

65%


 

Earnings per share for the fourth quarter of 2014 included two items that were not in our guidance for the quarter:  a 5-cent benefit for the reinstatement in December 2014 of the federal research tax credit and a 2-cent benefit from gains on sales of assets.

Cash generation

Amounts are in millions of dollars.








Trailing 12 Months 



  4Q14


 4Q14

 4Q13

Change

Cash flow from operations  

$  1,272


$ 3,892

$ 3,384

15%

Capital expenditures

$     125


$    385

$    412

-7%

Free cash flow

$  1,147


$ 3,507

$ 2,972

18%

Free cash flow % of revenue



27%

24%



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