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Last Update: 23-Apr-13 07:40 ET
Texas Instruments shares little changed following beat on GAAP earnings
Texas Instruments (TXN $34.95 +0.14) reported first quarter earnings of $0.32 per share, better than the Capital IQ consensus GAAP Estimate of $0.30, while revenues fell 7.6% year/year to $2.88 billion versus the $2.85 billion consensus. The company on March 7 raised EPS guidance to $0.28-0.32 from $0.24-0.32; revenue to $2.80-2.91 billion from $2.68-2.91 bln. The company issued guidance for the second quarter with EPS of $0.37-0.45 versus the $0.38 GAAP consensus and revenues of $2.93-3.17 billion versus the $3.04 billion consensus. Revenue from legacy wireless products is expected to decline by about $60 million QoQ at the middle of this range. The co previously announced that it is winding down investment in these products for the smartphone and consumer tablet markets. TI will update its second-quarter outlook on June 10, 2013. For the full year of 2013, TI expects ~the following: R&D expense: $1.5 billion, down from the prior estimate of $1.6 billion Capital expenditures: $0.5 billion, unchanged "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."
