Texas Instruments (NASDAQ:
) reported fourth quarter earnings Tuesday. The company beat
analyst expectations on both the top and bottom lines.
However, lower guidance sent shares slightly lower
after-hours, with shares falling after popping on the initial
For the fourth quarter of 2012, Texas Instruments reported
adjusted EPS of $0.08, beating analyst estimates of $0.07 per
share. On a GAAP basis, EPS came in at $0.23 per share, 52
percent lower than the same period last year. The company also
reported revenue that beat expectations, with sales totaling
$2.98 billion in the first quarter, beating analyst expectations
of sales of $2.95 billion.
Shares fell after-hours despite the stronger than expected
earnings following the company's first quarter guidance report.
Texas Instruments guided first quarter EPS between $0.24 and
$0.32, well below the estimate of $0.34 per share. Also, the
company expects revenue to be between $2.69 and $2.91 billion in
the quarter, whereas analysts had been looking for $2.89 billion
"We continue to operate in a weak demand environment," said
Rich Templeton, Texas Instrument's Chairman, President, and CEO.
"Our visibility into future demand remains limited as our lead
times are short and our customers are reluctant to commit to
extended backlog. On the positive side, we believe customers and
distributors are operating with lean inventory. Our own
operations are disciplined and performing well, with gross margin
up despite increased underutilization costs, and with operating
expenses down from a year ago."
Templeton also hinted that continued share buybacks and
dividend increases could come in the future.
"For the full year, free cash flow of almost $3 billion grew
20 percent and was 23 percent of our revenue. We returned 90
percent of this free cash flow to our shareholders through our
continued share repurchases and higher dividend payments. Our
strong free cash flow is the result of more of our revenue coming
from Analog and Embedded Processing, which offer solid growth and
high margins and have low capital needs. Our free cash flow will
also benefit from our strategic purchases of manufacturing
capacity during the past few years."
Texas Instrument's shares fell 1.02 percent after-hours
following the lower guidance for the first quarter. Notably, the
company recorded an $88 million expense in the fourth quarter
resulting from the amortization of intangible assets following
its acquisition of National Semiconductor in 2011.
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