Texas Instruments Incorporated (TI) announced first-quarter 2013 revenue of $2.89 billion, representing a decrease of 8% from the same period last year, net income of $362 million, an increase of 37% from the previous year, and earnings per share of 32 cents, up 45% compared with earnings per share of 22 cents in the year-earlier period. The current revenue and net income figures compare with revenue of $3.12 billion and net income of $265 million for the first-quarter of the previous year. The $97 million increase in net income included a discrete tax benefit of $65 million associated with the retroactive reinstatement of the federal R&D tax credit, which was signed into law in January, 2013.
Regarding the company's performance and returns to shareholders, Rich Templeton, TI's chairman, president and CEO, made the following comments: "Our revenue and earnings ended the quarter at the high end of our expected range. Customers continued to operate in a real-time mode, maintaining minimal component inventory and ordering parts as they were needed. Our short product lead times, well-positioned inventory and ready manufacturing capacity allow us to respond rapidly to changes in demand.
“TI is now firmly rooted in Analog and Embedded Processing, and in the first quarter these segments contributed 77 percent of our revenue – a full five points more than a year ago.
"Our business model generates strong cash flow from operations. Free cash flow for the trailing 12 months was almost $3 billion, up 16 percent compared with a year ago. Further, free cash flow comprised 23 percent of revenue, which is consistent with our target of 20-25 percent. Free cash flow is well in excess of net income, and we expect it to remain so for some time as non-cash expenses are included in net income.
"In the quarter, we announced a 33 percent increase in our dividend to $1.12 per share annualized, and we added another $5 billion to our stock repurchase authorization. Both increases reflect our confidence in the long-term sustainability of our Analog and Embedded Processing business model.
"We returned $911 million to shareholders through dividends and share repurchases in the first quarter. For the trailing 12 months, the return to shareholders totaled $3 billion, or 107 percent of free cash flow, consistent with our intention to return all our free cash flow to shareholders except what is needed to repay debt.
"Our balance sheet remains strong, with $3.9 billion of cash and short-term investments on hand at the end of the quarter, 84 percent of which is owned by the company's U.S. entities. Inventory was 101 days, down from 105 a year ago," Mr. Templeton concluded.
