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TI reports Q4 2023 and 2023 financial results and shareholder returns

Conference call on TI website at 3:30 p.m. Central time today

DALLAS, Jan. 23, 2024 — (PRNewswire) — Texas Instruments Incorporated (TI) (Nasdaq: TXN) today reported fourth quarter revenue of $4.08 billion, net income of $1.37 billion and earnings per share of $1.49. Earnings per share included a 3-cent benefit that was not in the company's original guidance.

Regarding the company's performance and returns to shareholders, Haviv Ilan, TI's president and CEO, made the following comments:

Free cash flow, a non-GAAP financial measure, is cash flow from operations less capital expenditures.

Earnings summary

(In millions, except per-share amounts)


Q4 2023


Q4 2022


Change 

Revenue


$

4,077


$

4,670


(13) %

Operating profit


$

1,533


$

2,176


(30) %

Net income


$

1,371


$

1,962


(30) %

Earnings per share


$

1.49


$

2.13


(30) %

 

Cash generation






Trailing 12 Months

(In millions)


Q4 2023


Q4 2023


Q4 2022


Change 

Cash flow from operations


$

1,924


$

6,420


$

8,720


(26) %

Capital expenditures


$

1,148


$

5,071


$

2,797


81 %

Free cash flow


$

776


$

1,349


$

5,923


(77) %

Free cash flow % of revenue






7.7 %



29.6 %



 

Cash return






Trailing 12 Months

(In millions)


Q4 2023


Q4 2023


Q4 2022


Change 

Dividends paid


$

1,181


$

4,557


$

4,297


6 %

Stock repurchases


$

65


$

293


$

3,615


(92) %

Total cash returned


$

1,246


$

4,850


$

7,912


(39) %

 

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES


Consolidated Statements of Income


For Three Months Ended

December 31,


For Years Ended

December 31,

(In millions, except per-share amounts)


2023


2022


2023


2022

Revenue


$

4,077


$

4,670


$

17,519


$

20,028

Cost of revenue (COR)



1,646



1,583



6,500



6,257

Gross profit



2,431



3,087



11,019



13,771

Research and development (R&D)



460



434



1,863



1,670

Selling, general and administrative (SG&A)



438



429



1,825



1,704

Restructuring charges/other





48





257

Operating profit



1,533



2,176



7,331



10,140

Other income (expense), net (OI&E)



113



51



440



106

Interest and debt expense



98



60



353



214

Income before income taxes



1,548



2,167



7,418



10,032

Provision for income taxes



177



205



908



1,283

Net income


$

1,371


$

1,962


$

6,510


$

8,749














Diluted earnings per common share


$

1.49


$

2.13


$

7.07


$

9.41














Average shares outstanding:













   Basic



908



906



908



916

   Diluted



915



916



916



926














Cash dividends declared per common share


$

1.30


$

1.24


$

5.02


$

4.69














Supplemental Information








Provision for income taxes is based on the following:







Operating taxes (calculated using the estimated annual effective tax rate)


$

180


$

237


$

974


$

1,384

Discrete tax items



(3)



(32)



(66)



(101)

Provision for income taxes (effective taxes)


$

177


$

205


$

908


$

1,283














A portion of net income is allocated to unvested restricted stock units (RSUs) on which we pay dividend equivalents. Diluted EPS

is calculated using the following:

Net income


$

1,371


$

1,962


$

6,510


$

8,749

Income allocated to RSUs



(7)



(9)



(33)



(39)

Income allocated to common stock for diluted EPS


$

1,364


$

1,953


$

6,477


$

8,710

 

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES


Consolidated Balance Sheets


December 31,

(In millions, except par value)


2023


2022

Assets







Current assets:







   Cash and cash equivalents


$

2,964


$

3,050

   Short-term investments



5,611



6,017

   Accounts receivable, net of allowances of ($16) and ($13)



1,787



1,895

   Raw materials



420



353

   Work in process



2,109



1,546

   Finished goods



1,470



858

   Inventories



3,999



2,757

   Prepaid expenses and other current assets



761



302

   Total current assets



15,122



14,021

Property, plant and equipment at cost



13,268



9,950

   Accumulated depreciation



(3,269)



(3,074)

   Property, plant and equipment



9,999



6,876

Goodwill



4,362



4,362

Deferred tax assets



757



473

Capitalized software licenses



223



152

Overfunded retirement plans



173



188

Other long-term assets



1,712



1,135

Total assets


$

32,348


$

27,207








Liabilities and stockholders' equity







Current liabilities:







   Current portion of long-term debt


$

599


$

500

   Accounts payable



802



851

   Accrued compensation



836



799

   Income taxes payable



172



189

   Accrued expenses and other liabilities



911



646

   Total current liabilities



3,320



2,985

Long-term debt



10,624



8,235

Underfunded retirement plans



108



118

Deferred tax liabilities



63



66

Other long-term liabilities



1,336



1,226

Total liabilities



15,451



12,630

Stockholders' equity:







   Preferred stock, $25 par value. Shares authorized – 10; none issued





   Common stock, $1 par value. Shares authorized – 2,400; shares issued – 1,741



1,741



1,741

   Paid-in capital



3,362



2,951

   Retained earnings



52,283



50,353

   Treasury common stock at cost







   Shares: 2023 – 832; 2022 – 835



(40,284)



(40,214)

   Accumulated other comprehensive income (loss), net of taxes (AOCI)



(205)



(254)

Total stockholders' equity



16,897



14,577

Total liabilities and stockholders' equity


$

32,348


$

27,207

 

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES


Consolidated Statements of Cash Flows


For Three Months Ended

December 31,


For Years Ended

December 31,

(In millions)


2023


2022


2023


2022

Cash flows from operating activities













   Net income


$

1,371


$

1,962


$

6,510


$

8,749

   Adjustments to net income:













   Depreciation



322



249



1,175



925

   Amortization of capitalized software



15



14



63



54

   Stock compensation



68



62



362



289

   (Gains) losses on sales of assets



1







(3)

   Deferred taxes



(140)



(173)



(299)



(191)

   Increase (decrease) from changes in:













   Accounts receivable



189



145



108



(194)

   Inventories



(91)



(353)



(1,242)



(847)

   Prepaid expenses and other current assets



8



(39)



46



6

   Accounts payable and accrued expenses



(10)



34



(33)



106

   Accrued compensation



126



136



29



22

   Income taxes payable



58



68



(7)



94

   Changes in funded status of retirement plans



(4)



(12)



45



114

   Other



11



(51)



(337)



(404)

Cash flows from operating activities



1,924



2,042



6,420



8,720














Cash flows from investing activities













   Capital expenditures



(1,148)



(967)



(5,071)



(2,797)

   Proceeds from asset sales







3



3

   Purchases of short-term investments



(2,565)



(3,688)



(12,705)



(14,483)

   Proceeds from short-term investments



3,411



3,650



13,387



13,657

   Other



(9)



(22)



24



37

Cash flows from investing activities



(311)



(1,027)



(4,362)



(3,583)














Cash flows from financing activities













   Proceeds from issuance of long-term debt





799



3,000



1,494

   Repayment of debt







(500)



(500)

   Dividends paid



(1,181)



(1,123)



(4,557)



(4,297)

   Stock repurchases



(65)



(848)



(293)



(3,615)

   Proceeds from common stock transactions



45



50



263



241

   Other



(14)



(12)



(57)



(41)

Cash flows from financing activities



(1,215)



(1,134)



(2,144)



(6,718)














Net change in cash and cash equivalents



398



(119)



(86)



(1,581)

Cash and cash equivalents at beginning of period



2,566



3,169



3,050



4,631

Cash and cash equivalents at end of period


$

2,964


$

3,050


$

2,964


$

3,050

 

Quarterly segment results 

(In millions)


Q4 2023


Q4 2022


Change 

Analog:









   Revenue


$

3,120


$

3,558


(12) %

   Operating profit


$

1,280


$

1,798


(29) %

Embedded Processing:









   Revenue


$

752


$

837


(10) %

   Operating profit


$

195


$

293


(33) %

Other:









   Revenue


$

205


$

275


(25) %

   Operating profit*


$

58


$

85


(32) %


* Includes restructuring charges/other.

 

Annual segment results 

(In millions)


2023


2022


Change 

Analog:









   Revenue


$

13,040


$

15,359


(15) %

   Operating profit


$

5,821


$

8,359


(30) %

Embedded Processing:









   Revenue


$

3,368


$

3,261


3 %

   Operating profit


$

1,008


$

1,253


(20) %

Other:









   Revenue


$

1,111


$

1,408


(21) %

   Operating profit*


$

502


$

528


(5) %


* Includes restructuring charges/other.

 

Non-GAAP financial information

This release includes references to free cash flow and ratios based on that measure. These are financial measures that were not prepared in accordance with GAAP. Free cash flow was calculated by subtracting capital expenditures from the most directly comparable GAAP measure, cash flows from operating activities (also referred to as cash flow from operations).

We believe that free cash flow and the associated ratios provide insight into our liquidity, our cash-generating capability and the amount of cash potentially available to return to shareholders, as well as insight into our financial performance. These non-GAAP measures are supplemental to the comparable GAAP measures.

Reconciliation to the most directly comparable GAAP measures is provided in the table below.



For Years Ended

December 31,



(In millions)


2023


2022


Change 

Cash flow from operations (GAAP)


$

6,420


$

8,720


(26) %

Capital expenditures



(5,071)



(2,797)



Free cash flow (non-GAAP)


$

1,349


$

5,923


(77) %










Revenue


$

17,519


$

20,028












Cash flow from operations as a percentage of revenue (GAAP)



36.6 %



43.5 %



Free cash flow as a percentage of revenue (non-GAAP)



7.7 %



29.6 %



This release also includes references to operating taxes, a non-GAAP term we use to describe taxes calculated using the estimated annual effective tax rate, a GAAP measure that by definition does not include discrete tax items. We believe the term operating taxes helps to differentiate from effective taxes, which include discrete tax items.

Notice regarding forward-looking statements

This release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as TI or its management "believes," "expects," "anticipates," "foresees," "forecasts," "estimates" or other words or phrases of similar import. Similarly, statements herein that describe TI's business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements.

We urge you to carefully consider the following important factors that could cause actual results to differ materially from the expectations of TI or our management:

For a more detailed discussion of these factors, see the Risk factors discussion in Item 1A of TI's most recent Form 10-K. The forward-looking statements included in this release are made only as of the date of this release, and we undertake no obligation to update the forward-looking statements to reflect subsequent events or circumstances. If we do update any forward-looking statement, you should not infer that we will make additional updates with respect to that statement or any other forward-looking statement.

About Texas Instruments

Texas Instruments Incorporated (Nasdaq: TXN) is a global semiconductor company that designs, manufactures, tests and sells analog and embedded processing chips for markets such as industrial, automotive, personal electronics, communications equipment and enterprise systems. Our passion to create a better world by making electronics more affordable through semiconductors is alive today, as each generation of innovation builds upon the last to make our technology smaller, more efficient, more reliable and more affordable – making it possible for semiconductors to go into electronics everywhere. We think of this as Engineering Progress. It's what we do and have been doing for decades. Learn more at TI.com.

TXN-G

Texas Instruments Logo. (PRNewsFoto/Texas Instruments Incorporated) (PRNewsfoto/Texas Instruments Incorporated)

 

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SOURCE Texas Instruments Incorporated

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Financial data for Texas Instruments Incorporated