TI reports 4Q15 and 2015 financial results and shareholder returns

 

4Q15 segment results

Amounts are in millions of dollars.



4Q15


4Q14

Change

Analog:






Revenue


$   2,073


$   2,123

-2%

Operating profit


$      787


$      822

-4%

Embedded Processing:






Revenue


$      700


$      670

4%

Operating profit


$      164


$      114

44%

Other:






Revenue


$      416


$      476

-13%

Operating profit*


$      191


$      164

16%

 

* Includes Acquisition charges and Restructuring charges/other.

 

Compared with the year-ago quarter:

Analog:  (includes High Volume Analog & Logic, Power Management, High Performance Analog and Silicon Valley Analog) 

  • Revenue decreased due to Power Management and High Performance Analog. Silicon Valley Analog also declined while High Volume Analog & Logic grew.
  • Operating profit decreased due to lower revenue and associated gross profit.

Embedded Processing:  (includes Microcontrollers, Processors and Connectivity)

  • Revenue increased due to Connectivity and Microcontrollers. Processors declined.
  • Operating profit increased due to lower operating expenses as well as higher revenue and associated gross profit.

Other:  (includes DLP® products, calculators, custom ASIC products and royalties)

  • Revenue declined due to custom ASIC products and DLP products.
  • Operating profit increased primarily due to Restructuring charges/other, partially offset by lower gross profit.

Year 2015 segment results

Amounts are in millions of dollars.



2015


2014

Change

Analog:






Revenue


$   8,339


$   8,104

3%

Operating profit


$   3,048


$   2,786

9%

Embedded Processing:






Revenue


$   2,787


$   2,740

2%

Operating profit


$      596


$      384

55%

Other:






Revenue


$   1,874


$   2,201

-15%

Operating profit*


$      630


$      777

-19%

 

* Includes Acquisition charges and Restructuring charges/other.

 

Compared with the prior year:

  • Analog revenue increased primarily due to High Volume Analog & Logic. Power Management and Silicon Valley Analog also grew and High Performance Analog declined. Operating profit increased due to higher revenue and associated gross profit, and lower manufacturing costs.
  • Embedded Processing revenue increased due to Connectivity and Microcontrollers, which together offset a decline in Processors. Operating profit increased primarily due to lower operating expenses.
  • Other revenue declined primarily due to custom ASIC products. Revenue from DLP products also declined. Operating profit declined primarily due to lower revenue and associated gross profit.

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).

The company believes that free cash flow and the associated ratios provide insight into its liquidity, its cash-generating capability and the amount of cash potentially available to return to investors, as well as insight into its financial performance. These non-GAAP measures are supplemental to the comparable GAAP measures.

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

Amounts are in millions of dollars.




For Years Ended





December 31,





2015


2014


Change

Cash flow from operations (GAAP)


$

4,268


$

3,892


10%

Capital expenditures



(551)



(385)



Free cash flow (non-GAAP)


$

3,717


$

3,507


6%










Revenue


$

13,000


$

13,045












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



32.8%



29.8%



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



28.6%



26.9%



 

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 its management:

  • Market demand for semiconductors, particularly in markets such as personal electronics and communications equipment;
  • TI's ability to maintain or improve profit margins, including its ability to utilize its manufacturing facilities at sufficient levels to cover its fixed operating costs, in an intensely competitive and cyclical industry;
  • TI's ability to develop, manufacture and market innovative products in a rapidly changing technological environment;
  • TI's ability to compete in products and prices in an intensely competitive industry;
  • TI's ability to maintain and enforce a strong intellectual property portfolio and obtain needed licenses from third parties;
  • Expiration of license agreements between TI and its patent licensees, and market conditions reducing royalty payments to TI;
  • Economic, social and political conditions in the countries in which TI, its customers or its suppliers operate, including security risks, health conditions, possible disruptions in transportation, communications and information technology networks and fluctuations in foreign currency exchange rates;
  • Natural events such as health epidemics, severe weather and earthquakes in the locations in which TI, its customers or its suppliers operate;
  • Availability and cost of raw materials, utilities, manufacturing equipment, third-party manufacturing services and manufacturing technology;
  • Changes in the tax rate applicable to TI as the result of changes in tax law, the jurisdictions in which profits are determined to be earned and taxed, the outcome of tax audits and the ability to realize deferred tax assets;
  • Compliance with or changes in the complex laws, rules and regulations to which TI is or may become subject, or actions of enforcement authorities, that restrict our ability to manufacture our products or operate our business, or subject us to fines, penalties, or other legal liability;
  • Losses or curtailments of purchases from key customers and the timing and amount of distributor and other customer inventory adjustments;
  • Financial difficulties of our distributors or their promotion of competing product lines to TI's detriment;
  • A loss suffered by a customer or distributor of TI with respect to TI-consigned inventory;
  • Customer demand that differs from our forecasts;
  • The financial impact of inadequate or excess TI inventory that results from demand that differs from projections;
  • Impairments of our non-financial assets;
  • Product liability or warranty claims, claims based on epidemic or delivery failure, recalls by TI customers for a product containing a TI part or other legal proceedings;
  • TI's ability to recruit and retain skilled personnel;
  • Timely implementation of new manufacturing technologies and installation of manufacturing equipment, and the ability to obtain needed third-party foundry and assembly/test subcontract services;
  • TI's obligation to make principal and interest payments on its debt;
  • TI's ability to successfully integrate and realize opportunities for growth from acquisitions, and our ability to realize our expectations regarding the amount and timing of restructuring charges and associated cost savings; and
  • Breaches of our information technology systems or those of our customers or suppliers.

For a more detailed discussion of these factors, see the Risk Factors discussion in Item 1A of TI's Form 10-K for the year ended December 31, 2014 . The forward-looking statements included in this release are made only as of the date of this release. TI undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or risks. 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 (TI) is a global semiconductor design and manufacturing company that develops analog ICs and embedded processors. By employing the world's brightest minds, TI creates innovations that shape the future of technology. TI is helping more than 100,000 customers transform the future, today. Learn more at www.ti.com .

TI trademarks:
            DLP

Other trademarks are the property of their respective owners.

TXN-G

 

To view the original version on PR Newswire, visit: http://www.prnewswire.com/news-releases/ti-reports-4q15-and-2015-financial-results-and-shareholder-returns-300210918.html

SOURCE Texas Instruments Incorporated

Contact:
Texas Instruments Incorporated
Media: Chris Rongone, 214-479-6868, c- Email Contact
Whitney Jodry, 214-479-0952
Email Contact Investor Relations: Dave Pahl, 214-479-4629
Email Contact
Brandon Hodge, 214-479-3515
Email Contact (Please do not publish these numbers or email addresses.)
Web: http://www.ti.com



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