Seeking Alpha

TI guides in-line; gross margin hits new record

  • Texas Instruments (NASDAQ:TXN) expects Q3 revenue of $3.31B-$3.59B and EPS of $0.66-$0.76 vs. a consensus of $3.44B and $0.68.
  • Gross margin rose to 57.1% in Q2 (a new record) from 53.9% in Q1 and 51.5% a year ago. TI attributes the improvement to "the quality of our Analog and Embedded Processing portfolio and the efficiency of our manufacturing strategy." Opex fell to 24.9% of revenue from 28.3% a year ago.
  • Analog revenue +14% Y/Y to $2B, an improvement from Q1's 11% growth. Analog op. profit +60% to $664M (68% of total op. profit).
  • Embedded processing revenue +14% to $703M vs. +17% in Q1; division op. profit +93% to $104M. Other revenue (DLPs, calculators, legacy wireless) -13% to $594M vs. -28% in Q1; division op. profit -51% to $214M.
  • Free cash flow for the trailing 12 months is $3.2B (+10% Y/Y). Contributing to the growth: Capex during this time fell 9% to a mere $388M.
  • $743M was spent on buybacks in Q2, and $2.93B has been spent over the last 12 months.
  • TXN -0.7% AH. Shares went into earnings near their 52-week high.
  • Q2 results, PR
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