Texas Instruments Incorporated (NASDAQ: TXN) fell Tuesday on upbeat earnings for its third quarter, while sales missed views. The company issued weak forecast for the current quarter.
The Dallas-based company reported third-quarter revenue of $4.26 billion, net income of $1.57 billion and earnings per share of $1.58.
Revenue increased 4% from the same quarter a year ago; however, demand for our products slowed across most markets. In its core businesses, Analog revenue grew 8% and Embedded Processing declined 4% from the same quarter a year ago.
CEO Rich Templeton said: "Our cash flow from operations of $7.0 billion for the trailing 12 months again underscored the strength of our business model. Free cash flow for the trailing 12 months was $5.9 billion, or 37.5% of revenue. This reflects the quality of our product portfolio, as well as the efficiency of our manufacturing strategy, including the benefit of 300-millimeter Analog production.
Templeton went on to say: "We have returned $6.2 billion to owners in the past 12 months through stock repurchases and dividends, and our strategy to return to owners all of our free cash flow remains consistent. Over the last 12 months, our dividends represented 41% of free cash flow, emphasizing their sustainability.
"In September, we announced we would increase our dividend by 24% and also increased our share repurchase authorizations by $12 billion, which together reflect our commitment to return all free cash flow to our owners.
TI's fourth-quarter outlook is for revenue in the range of $3.60 billion to $3.90 billion, and earnings per share between $1.14 and $1.34.
Said Templeton, “We continue to expect our ongoing annual operating tax rate to be about 20% in 2018 and about 16% starting in 2019."
Shares opened Wednesday down $4.11, or 4.1%, to $96.14.
