Texas Instruments Incorporated (TI) today reported first-quarter 2016 revenue (for the three months ended 31 March) of $3.01 billion (down 5% from Q1 of 2015), net income of $668 million (up 2% from Q1 of 2015) and earnings per share of 65 cents (up 7% from Q1 of 2015).
Regarding the company's performance and returns to shareholders, Rich Templeton, TI's chairman, president and CEO, made the following comments: "Revenue for the quarter was in the upper half of our expected range. Compared with a year ago, notable market activity for our products included continuing strength in automotive, as well as improvement in industrial and communications equipment. Revenue was down 5 percent due to weakness within the personal electronics market, which declined as expected.
"Our core businesses of Analog and Embedded Processing comprised 87 percent of first-quarter revenue. From a year ago, Analog revenue declined 8 percent while Embedded Processing revenue grew 8 percent. Operating margin increased in both businesses.
"Gross margin of 60.6 percent was a new record, reflecting the quality of our product portfolio, as well as the efficiency of our manufacturing strategy, including the benefit of 300-millimeter Analog production.
"Our cash flow from operations once again underscored the strength of our business model. Free cash flow for the trailing 12 months was up 1 percent from a year ago to $3.7 billion. This represents 28.4 percent of revenue, up from 27.3 percent a year ago, and is consistent with our targeted range of 20-30 percent of revenue.
"We have returned $4.2 billion to shareholders in the past 12 months 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 $2.8 billion of cash and short-term investments at the end of the quarter, 80 percent of which was owned by the company's U.S. entities. Inventory ended the quarter at 137 days.
"TI's second-quarter outlook is for revenue in the range of $3.07 billion to $3.33 billion, and earnings per share between 67 and 77 cents. For 2016, TI's annual effective tax rate is expected to be about 30 percent, unchanged from previous guidance."
