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01/10 16:58
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals a stable quarter with mixed signals. Strong automotive and data center growth offsets slowing industrial growth. EPS guidance is weak, but restructuring and strategic R&D investments suggest long-term potential. The Q&A highlights management's reluctance to give detailed guidance, raising uncertainty. Overall, the stock is likely to remain neutral, with no significant positive or negative catalysts.
Revenue $4.7 billion, an increase of 7% sequentially and an increase of 14% year-over-year. Growth attributed to increases in Analog (16% YoY), Embedded Processing (9% YoY), and Other segment (11% YoY).
Industrial Market Revenue Increased about 25% year-on-year and was up low single digits sequentially. Growth followed a strong result in the second quarter.
Automotive Market Revenue Increased upper single digits year-on-year and around 10% sequentially. Growth observed across all regions.
Personal Electronics Revenue Grew low single digits year-on-year and upper single digits sequentially.
Enterprise Systems Revenue Grew about 35% year-on-year and about 20% sequentially.
Communications Equipment Revenue Grew about 45% year-on-year and was up about 10% sequentially.
Gross Profit $2.7 billion or 57% of revenue. Sequentially, gross profit margin decreased 50 basis points.
Operating Expenses $975 million, up 6% from a year ago. On a trailing 12-month basis, operating expenses were $3.9 billion or 23% of revenue.
Operating Profit $1.7 billion or 35% of revenue, up 7% from the year-ago quarter.
Net Income $1.4 billion or $1.48 per share. Earnings per share included a $0.10 reduction due to restructuring charges related to operational efficiencies and planned closures of 250-millimeter fabs.
Cash Flow from Operations $2.2 billion in the quarter and $6.9 billion on a trailing 12-month basis.
Capital Expenditures $1.2 billion in the quarter and $4.8 billion over the last 12 months.
Free Cash Flow $2.4 billion on a trailing 12-month basis, including $637 million of CHIPS Act incentives and a $75 million payment received in the third quarter.
Dividends Paid $1.2 billion in the quarter. Announced a 4% dividend increase in September, marking 22 consecutive years of increases.
Stock Repurchases $119 million in the quarter.
Total Returns to Owners $6.6 billion in the past 12 months.
Cash and Short-term Investments $5.2 billion at the end of the third quarter.
Total Debt Outstanding $14 billion with a weighted average coupon of 4%.
Inventory $4.8 billion at the end of the quarter, up $17 million from the prior quarter. Days were 215, down 16 days sequentially.
Analog revenue: Grew 16% year-over-year and sequentially.
Embedded Processing revenue: Grew 9% year-over-year and sequentially.
Other segment revenue: Grew 11% from the year-ago quarter.
Industrial market: Increased about 25% year-on-year and was up low single digits sequentially.
Automotive market: Increased upper single digits year-on-year and around 10% sequentially with growth across all regions.
Personal electronics: Grew low single digits year-on-year and upper single digits sequentially.
Enterprise systems: Grew about 35% year-on-year and about 20% sequentially.
Communications equipment: Grew about 45% year-on-year and was up about 10% sequentially.
Gross profit: $2.7 billion or 57% of revenue, with a sequential decrease of 50 basis points in gross profit margin.
Operating expenses: $975 million, up 6% from a year ago.
Net income: $1.4 billion or $1.48 per share, including a $0.10 reduction due to restructuring charges.
Inventory: $4.8 billion, up $17 million from the prior quarter, with days at 215, down 16 days sequentially.
Operational efficiencies: Restructuring charges of $0.08 per share related to planned closures of last 250-millimeter fabs.
Dividend increase: Announced a 4% increase in dividends, marking the 22nd consecutive year of increases.
CHIPS Act incentives: Received $637 million in incentives, including a $75 million payment in the third quarter.
Macroeconomic Uncertainty: The semiconductor market recovery is slower than prior upturns, likely due to broader macroeconomic dynamics and overall uncertainty.
Restructuring Charges: Earnings per share included a $0.10 reduction due to $0.08 of restructuring charges related to operational efficiency efforts, including planned closures of 250-millimeter fabs.
Tax Legislation Impact: The fourth quarter outlook includes changes related to new U.S. tax legislation, which will increase the effective tax rate to about 13%, with further increases expected in 2026.
Gross Profit Margin Decline: Gross profit margin decreased by 50 basis points sequentially, indicating potential pressure on profitability.
Inventory Management: Inventory levels increased slightly, with days of inventory at 215, which could pose risks if demand fluctuates unexpectedly.
Revenue Outlook: TI expects fourth quarter 2025 revenue to be in the range of $4.22 billion to $4.58 billion.
Earnings Per Share (EPS) Guidance: Earnings per share for the fourth quarter 2025 are projected to be in the range of $1.13 to $1.39.
Tax Rate Projections: The effective tax rate for the fourth quarter 2025 is expected to be about 13%, with a projected effective tax rate of 13% to 14% in 2026.
Capital Allocation and Long-Term Strategy: TI will continue to focus on manufacturing and technology, a broad product portfolio, channel reach, and diverse long-lived positions. The company aims to strengthen these advantages through disciplined capital allocation to drive long-term free cash flow per share growth.
Dividend Increase: In September, the company announced a 4% increase in its dividend, marking the 22nd consecutive year of dividend increases.
Dividend Payment: The company paid $1.2 billion in dividends during the quarter.
Commitment to Shareholders: The company emphasized its continued commitment to returning free cash flow to its owners over time.
Share Repurchase: The company repurchased $119 million of its stock during the quarter.
Total Shareholder Returns: In total, the company returned $6.6 billion to its owners over the past 12 months, including dividends and share repurchases.
The earnings call reveals a stable quarter with mixed signals. Strong automotive and data center growth offsets slowing industrial growth. EPS guidance is weak, but restructuring and strategic R&D investments suggest long-term potential. The Q&A highlights management's reluctance to give detailed guidance, raising uncertainty. Overall, the stock is likely to remain neutral, with no significant positive or negative catalysts.
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