- 4Q06 TI Revenue Down 8% Sequentially, Up 4% from Year Ago
- 4Q06 EPS of $0.45, Including Research Tax Credit
- Record TI Revenue and Profit Margins in 2006
- High-Performance Analog Revenue Growth of 33% in 2006
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Financials in MS Excel Format (61KB)
Except as noted, financial results are for continuing operations.
The sale of TI’s former Sensors & Controls business was completed
on April 27, 2006, and that business is reported as a discontinued operation.
Also, the Education Technology segment has been renamed Education Technology
to more accurately reflect the strategic focus of this business.
DALLAS (Jan. 22, 2007) – Texas Instruments Incorporated (TI) (NYSE:
TXN) today reported fourth-quarter 2006 revenue of $3.46 billion. Revenue
declined 8 percent compared with the third quarter due to a broad-based
decline in company semiconductor product revenue of 5 percent and a
seasonal decline in graphing calculator sales. Compared with the same
quarter a year ago, revenue grew 4 percent due to higher demand for
the company’s semiconductor and calculator products.
For the year, TI revenue grew 16 percent to a record $14.25 billion.
Growth was driven primarily by strong demand for the company’s
analog products, especially high-performance analog, and DSP products.
In the fourth quarter, earnings per share (EPS) from continuing operations
were $0.45. This included a $0.05 EPS benefit from the reinstatement
of the federal research tax credit, which was signed into law in December
2006 and was retroactive to the beginning of the year. Also, in the
quarter TI signed new patent license agreements to replace agreements
that had previously expired. These included catch-up payments resulting
in a $0.01 EPS benefit to cover the period between expiration of the
prior agreements and signing of the new agreements. EPS included $0.03
of expense for stock-based compensation.
For the year, EPS from continuing operations of $1.69 increased 30 percent
from the prior year. EPS in 2006 included a full year of stock-option
expense of $0.14 resulting in $0.07 of additional expense compared with
the prior year. The company began expensing employee stock options in
the third quarter of 2005.
“TI delivered important financial achievements in 2006,” said
Rich Templeton, TI president and CEO. “Specifically, our semiconductor
revenue grew more than one and a half times faster than the market, our
earnings per share increased almost twice as fast as our revenue, and
our return on invested capital expanded to 21.5 percent. Most important
to these results was our high-performance analog product line, which grew
revenue 33 percent and continued to raise the bar on gross margin for
the entire company.
“As expected, demand in the fourth quarter of the year was unseasonably
weak, and we limited production to reduce our inventories. Even with these
pressures, our profitability remained relatively stable, reflecting the
benefits of our hybrid manufacturing strategy whereby we outsource to
foundries a large part of our most costly production. Challenges continue
in the first quarter as we operate in an environment where customers want
lower levels of inventory and where growth in the wireless market is skewed
to low-priced, basic-featured cell phones instead of higher-priced, full-featured
phones.
“Entering 2007, we challenge ourselves to keep improving performance.
One way we’ll do this is by changing the way we develop advanced
digital process technology. Instead of separately creating our own core
technology, we will work collaboratively with our foundry partners to
specify and drive the next generations of digital process technology,
and we will continue making products on these technologies in our world-class
factories. This is a natural extension of our existing relationships with
foundries that will increase our R&D efficiency and our capital efficiency
while maintaining our responsiveness to customers. Additionally, we will
stop production at an older digital factory and move its manufacturing
equipment into several of our analog factories to support greater analog
output.”
These changes will be made throughout 2007, and when complete are expected
to reduce annualized costs by about $200 million. About 500 jobs are expected
to be reduced by year end. In total, the company will take restructuring
charges of approximately $55 million, about evenly distributed across
the four quarters of 2007.
Gross Profit
In the fourth quarter, gross profit was $1.75 billion, or 50.5 percent
of revenue. This was a decrease of $184 million from the prior quarter
due to lower revenue. It was an increase of $91 million from the year-ago
quarter primarily due to lower depreciation in the Semiconductor segment.
For the year, gross profit was $7.26 billion, or a record 50.9 percent
of revenue. This was a 21 percent increase from the prior year due primarily
to higher revenue, as well as lower depreciation, in the Semiconductor
segment.
Operating Expenses
In the fourth quarter, research and development (R&D) expense was
$556 million, or 16.0 percent of revenue. R&D expense was down 2 percent
from the prior quarter due to seasonally lower pay and benefits. R&D
expense increased $63 million from the year-ago quarter due to higher
investment in new semiconductor technology, particularly for wireless
applications. For the year, R&D expense was $2.20 billion, or 15.4
percent of revenue. This was an increase of $209 million from the prior
year due to higher investment in new semiconductor technology and $48
million of additional stock-based compensation expense.
Selling, general and administrative (SG&A) expense was $425 million,
or 12.3 percent of revenue. SG&A expense decreased 2 percent from
the prior quarter due to seasonally lower pay and benefits, partially
offset by higher marketing expense. SG&A expense was $21 million higher
than the year-ago quarter primarily because of increased marketing expense.
For the year, SG&A expense was $1.70 billion. This was an increase
of $226 million from the prior year primarily due to the combination of
higher marketing expense in the Semiconductor segment and $77 million
of higher stock-based compensation expense.
Operating Profit
In the fourth quarter, operating profit was $767 million, or 22.1 percent
of revenue. This was a decrease of $163 million from the prior quarter
primarily due to lower gross profit in the Semiconductor segment. Operating
profit was up slightly from the year-ago quarter. For the year, operating
profit was $3.37 billion, or a record 23.6 percent of revenue. This was
an increase of $808 million, or 32 percent, due to higher gross profit
in the Semiconductor segment.
In the fourth quarter, total stock-based compensation expense of $78 million,
or 2.3 percent of revenue, was included in Corporate. This was about even
with the prior quarter and a $7 million decrease from the year-ago quarter.
For the year, total stock-based compensation was $332 million. This was
an increase of $157 million from the prior year, as 2006 was the first
full year for employee stock-option expensing, which the company began
in the third quarter of 2005.
Other Income (Expense) Net (OI&E)
In the fourth quarter, OI&E was $70 million. This was an increase
of $15 million from the prior quarter and an increase of $19 million from
the year-ago quarter, both due to the settlement of all remaining matters
related to grants from the Italian government regarding TI’s former
memory business operations. For the year, OI&E was $265 million. This
was an increase of $60 million from 2005 primarily due to higher interest
income.
Net Income
In the fourth quarter, income from continuing operations was $671 million,
or $0.45 per share. For the year, income from continuing operations was
$2.64 billion, or $1.69 per share. Net income was $4.34 billion, or $2.78
per share. This includes $1.09 per share from discontinued operations,
almost all of which was from the gain on the sale of the company’s
former Sensors & Controls business.
The fourth quarter included a cumulative adjustment to income tax expense
for the federal research tax credit, which was signed into law in December
and was retroactive to the beginning of the year. The overall tax rate,
including discrete items and the research tax credit, was 27 percent for
2006.
Orders
TI orders were $3.08 billion. This was a decrease of $352 million from
the prior quarter and a decrease of $411 million from the year-ago quarter.
The decreases were primarily due to lower demand for DSP and DLP®
products in the company’s Semiconductor segment. For the year, TI
orders were $14.02 billion. This was an increase of $1.17 billion from
the prior year primarily due to higher demand for the company’s
analog products.
Cash
In the fourth quarter, cash flow from operations was $846 million. This
was an increase of $427 million from the prior quarter primarily due to
changes in working capital. For the year, cash flow from operations was
$2.45 billion. This was a decrease of $1.15 billion from the prior year
primarily due to changes in working capital, particularly for the payment
of income taxes related to the gain on the sale of the company’s
former Sensors & Controls business, that more than offset higher income
from continuing operations.
Total cash (cash and cash equivalents plus short-term investments) was
$3.72 billion at the end of the fourth quarter. This was down $467 million
from the end of the prior quarter and down $1.61 billion from the end
of 2005. In the fourth quarter, the company used $1.13 billion to repurchase
37 million shares and paid $59 million in dividends. For the year, the
company used $5.30 billion to repurchase 172 million shares, reducing
shares outstanding by 9 percent. In 2006, the company received $3.00 billion
of cash from the sale of its former Sensors & Controls business.
Capital Spending and Depreciation
In the fourth quarter, capital expenditures were $214 million. This was
a decrease of $62 million from the prior quarter and a decrease of $120
million from the year-ago quarter. TI’s capital expenditures in
the fourth quarter were primarily for equipment used in the assembly and
test of semiconductors. For the year, capital expenditures were $1.27
billion. This was about the same as the prior year. TI’s 2006 capital
expenditures were primarily for equipment used in the assembly and test
of semiconductors, as well as for advanced wafer fabrication equipment
used to manufacture semiconductors.
In the fourth quarter, depreciation was $249 million. This was a decrease
of $17 million from the prior quarter and a decrease of $87 million from
the year-ago quarter. For the year, depreciation was $1.05 billion. This
was a decrease of $294 million compared with 2005. About half of this
decline was due to the company’s change at the beginning of 2006
from an accelerated to a straight-line method of depreciation.
Accounts Receivable and Inventories
Accounts receivable were $1.77 billion at the end of the fourth quarter.
This was a decrease of $315 million from the prior quarter primarily due
to lower revenue. Accounts receivable increased $126 million from the
year-ago quarter primarily due to higher revenue. Days sales outstanding
were 46 at the end of the fourth quarter compared with 50 at the end of
the prior quarter and 45 at the end of 2005.
Inventory was $1.44 billion at the end of the fourth quarter. This was
a decrease of $54 million from the prior quarter as the company reduced
production levels. Compared with a year ago, when inventory was below
desired levels, inventory increased $252 million. Days of inventory at
the end of the fourth quarter were 75 compared with 73 at the end of the
prior quarter and 64 a year ago.
Outlook
TI intends to provide a mid-quarter update to its financial outlook
on March 12, 2007, by issuing a press release and holding a conference
call. Both will be available on the company’s web site.
For the first quarter of 2007, TI expects revenue to be in the following
ranges:
-
Total TI, $3.01 billion to $3.28 billion;
-
Semiconductor, $2.95 billion to $3.20 billion; and
-
Education Technology, $60 million to $80 million.
TI expects earnings per share to be in the range of $0.28 to $0.34.
In 2007, TI expects: the annual effective tax rate to be about 28 percent,
expense for R&D to be about $2.3 billion, capital expenditures to
be about $0.9 billion, and depreciation to be about $1.0 billion.
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Income
(Millions of dollars, except per-share amounts)
For Three Months Ended For Years Ended
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2006 2006 2005 2006 2005
Net revenue $3,463 $3,761 $3,324 $14,255 $12,335
Cost of revenue (COR) 1,715 1,829 1,667 6,996 6,319
Gross profit 1,748 1,932 1,657 7,259 6,016
Gross profit % of revenue 50.5% 51.4% 49.8% 50.9% 48.8%
Research and development (R&D) 556 570 493 2,195 1,986
R&D % of revenue 16.0% 15.2% 14.8% 15.4% 16.1%
Selling, general and
administrative (SG&A) 425 432 404 1,697 1,471
SG&A % of revenue 12.3% 11.5% 12.1% 11.9% 11.9%
Total operating costs
and expenses 2,696 2,831 2,564 10,888 9,776
Profit from operations 767 930 760 3,367 2,559
Operating profit %
of revenue 22.1% 24.7% 22.9% 23.6% 20.7%
Other income (expense) net 70 55 51 265 205
Interest expense on loans 1 1 2 7 9
Income from continuing operations
before income taxes 836 984 809 3,625 2,755
Provision for income taxes 165 298 187 987 582
Income from continuing
operations 671 686 622 2,638 2,173
Income from discontinued
operations, net of income
taxes (3) 16 33 1,703 151
Net income $ 668 $ 702 $ 655 $ 4,341 $ 2,324
Basic earnings per
common share:
Income from continuing
operations $ .46 $ .46 $ .39 $ 1.73 $ 1.33
Net income $ .45 $ .47 $ .41 $ 2.84 $ 1.42
Diluted earnings per
common share:
Income from continuing
operations $ .45 $ .45 $ .38 $ 1.69 $ 1.30
Net income $ .45 $ .46 $ .40 $ 2.78 $ 1.39
Average shares outstanding
(millions):
Basic 1,469 1,506 1,606 1,528 1,640
Diluted 1,499 1,537 1,643 1,560 1,671
Cash dividends declared
per share of common stock $ .040 $ .030 $ .030 $ .130 $ .105
Stock-based compensation
expense included
in continuing operations:
COR $ 15 $ 15 $ 17 $ 64 $ 32
R&D 24 24 27 101 53
SG&A 39 40 41 167 90
Profit from operations $ 78 $ 79 $ 85 $ 332 $ 175
% of revenue 2.3% 2.1% 2.6% 2.3% 1.4%
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheets
(Millions of dollars, except share amounts)
Dec. 31, Sept. 30, Dec. 31,
2006 2006 2005
Assets
Current assets:
Cash and cash equivalents $ 1,183 $ 1,430 $ 1,214
Short-term investments 2,534 2,754 4,116
Accounts receivable, net of allowances of
($26), ($29) and ($34) 1,774 2,089 1,648
Raw materials 105 117 83
Work in process 930 946 813
Finished goods 402 428 289
Inventories 1,437 1,491 1,185
Deferred income taxes 741 666 619
Prepaid expenses and other current assets 181 190 135
Assets of discontinued operations 4 1 495
Total current assets 7,854 8,621 9,412
Property, plant and equipment at cost 7,751 7,890 8,374
Less accumulated depreciation (3,801) (3,901) (4,644)
Property, plant and equipment, net 3,950 3,989 3,730
Equity and other investments 287 270 236
Goodwill 792 792 677
Acquisition-related intangibles 118 131 60
Deferred income taxes 601 411 393
Capitalized software licenses, net 188 175 243
Overfunded retirement 58 -- --
Prepaid retirement costs -- 308 199
Other assets 82 88 113
Total assets $13,930 $14,785 $15,063
Liabilities and Stockholders' Equity
Current liabilities:
Loans payable and current portion
of long-term debt $ 43 $ 43 $ 301
Accounts payable 560 744 702
Accrued expenses and other liabilities 1,029 1,066 948
Income taxes payable 284 458 154
Accrued profit sharing and retirement 162 118 121
Liabilities of discontinued operations -- -- 151
Total current liabilities 2,078 2,429 2,377
Long-term debt -- -- 329
Underfunded retirement 208 -- --
Accrued retirement costs -- 67 136
Deferred income taxes 23 14 23
Deferred credits and other liabilities 261 248 261
Total liabilities 2,570 2,758 3,126
Stockholders' equity:
Preferred stock, $25 par value.
Authorized -- 10,000,000 shares.
Participating cumulative preferred.
None issued. -- -- --
Common stock, $1 par value. Authorized --
2,400,000,000 shares. Shares issued:
December 31, 2006 -- 1,739,108,694;
September 30, 2006 -- 1,739,102,544;
December 31, 2005 -- 1,738,780,512 1,739 1,739 1,739
Paid-in capital 885 820 742
Retained earnings 17,529 16,927 13,394
Less treasury common stock at cost:
Shares: December 31, 2006 -- 289,078,450;
September 30, 2006 -- 255,218,212;
December 31, 2005 -- 142,190,707 (8,430) (7,413) (3,856)
Accumulated other comprehensive loss (363) (45) (81)
Unearned compensation -- (1) (1)
Total stockholders' equity 11,360 12,027 11,937
Total liabilities and stockholders' equity $13,930 $14,785 $15,063
Presentation reflects adoption of Statement of Financial Accounting Standards
No. 158 in the fourth quarter of 2006.
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Millions of dollars)
For Three Months Ended For Years Ended
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2006 2006 2005 2006 2005
Cash flows from operating
activities:
Net income $668 $702 $655 $4,341 $2,324
Adjustments to reconcile
net income to cash
provided by operating
activities of continuing
operations:
Less (income)/loss from
discontinued operations 3 (16) (33) (1,703) (151)
Depreciation 249 266 336 1,052 1,346
Stock-based compensation 78 79 85 332 175
Amortization of capitalized
software 25 26 33 110 126
Amortization of
acquisition-related
intangibles 13 15 13 59 55
Deferred income taxes (77) (46) (93) (200) (194)
Increase/(decrease) from
changes in:
Accounts receivable 315 (149) 105 (116) (127)
Inventories 54 (156) (111) (248) (23)
Prepaid expenses and other
current assets (7) (4) 30 (96) 111
Accounts payable and
accrued expenses (209) 82 (24) (104) 254
Income taxes payable (156) (377) 99 (716) 35
Accrued profit sharing
and retirement 30 41 15 28 (140)
Noncurrent accrued
retirement costs (94) (65) (180) (210) (159)
Other (46) 21 (50) (76) (29)
Net cash provided
by operating activities
of continuing operations 846 419 880 2,453 3,603
Cash flows from investing
activities:
Additions to property,
plant and equipment (214) (276) (334) (1,272) (1,288)
Proceeds from sales
of assets 14 -- -- 3,000 42
Purchases of cash
investments (1,275) (1,330) (2,690) (6,821) (5,851)
Sales and maturities
of cash investments 1,509 2,585 1,887 8,418 5,430
Purchases of equity
investments (7) (11) (4) (40) (17)
Sales of equity and debt
investments 2 -- 14 11 53
Acquisition of businesses,
net of cash acquired -- -- -- (205) --
Net cash provided by
(used in) investing
activities of continuing
operations 29 968 (1,127) 3,091 (1,631)
Cash flows from financing
activities:
Proceeds from loans
and long-term debt -- -- 275 -- 275
Payments on loans and
long-term debt -- -- (1) (586) (11)
Dividends paid
on common stock (59) (46) (48) (199) (173)
Sales and other common
stock transactions 51 89 128 419 461
Excess tax benefit
from stock option
exercises 15 21 17 100 59
Stock repurchases (1,130) (1,695) (870) (5,302) (4,151)
Net cash used in financing
activities of continuing
operations (1,123) (1,631) (499) (5,568) (3,540)
Cash flows from
discontinued operations:
Operating activities -- -- 28 7 169
Investing activities -- -- (13) (16) (56)
Net cash provided by (used in)
discontinued operations -- -- 15 (9) 113
Effect of exchange rate
changes on cash 1 (4) 4 2 6
Net decrease in cash and cash
equivalents (247) (248) (727) (31) (1,449)
Cash and cash equivalents,
beginning of period 1,430 1,678 1,941 1,214 2,663
Cash and cash equivalents,
end of period $1,183 $1,430 $1,214 $1,183 $1,214
Business Segment Net Revenue
(Millions of dollars)
For Three Months Ended For Years Ended
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2006 2006 2005 2006 2005
Semiconductor $3,385 $3,579 $3,257 $13,730 $11,829
Education Technology 78 182 67 525 506
Total net revenue $3,463 $3,761 $3,324 $14,255 $12,335
Business Segment Profit (Loss)
(Millions of dollars)
For Three Months Ended For Years Ended
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2006 2006 2005 2006 2005
Semiconductor $908 $1,008 $912 $3,831 $2,808
Education Technology 19 83 10 200 188
Corporate (160) (161) (162) (664) (437)
Profit from operations $767 $930 $760 $3,367 $2,559
Profit from operations in Corporate includes, in millions of dollars, stock-based
compensation expense of $78, $79 and $85 for fourth quarter and third quarter
of 2006 and fourth quarter of 2005, and $332 and $175 for years ended December
31, 2006 and 2005.
Profit from operations from Semiconductor for the year ended December 31,
2006, includes, in millions of dollars, second-quarter benefits of $60 from
a royalty settlement and $57 from a sales tax refund.
Semiconductor
- Revenue in the fourth quarter was $3.39 billion. This was a decrease
of 5 percent from the prior quarter due to a broad-based decline in
demand. Compared with a year ago, revenue increased 4 percent primarily
due to higher demand for analog products. For the year, Semiconductor
revenue was $13.73 billion. This was an increase of 16 percent due to
higher demand for analog products, especially high-performance analog,
and DSP products.
- In the fourth quarter, analog revenue was down 4 percent from
the prior quarter primarily due to a broad-based decline in demand.
Analog revenue increased 9 percent from the year-ago quarter primarily
due to demand for high-performance analog products. Revenue from
high-performance analog products declined 4 percent from the prior
quarter and increased 22 percent from a year ago. For the year,
analog revenue increased 18 percent primarily due to demand for
high-performance analog products. Revenue from high-performance
analog products increased 33 percent primarily due to market-share
gains. In 2006, about 40 percent of total Semiconductor revenue
came from analog.
- In the fourth quarter, DSP revenue was down 11 percent from the
prior quarter primarily due to lower demand for wireless products.
DSP revenue decreased 2 percent from the year-ago quarter primarily
due to lower demand for broadband residential gateway as well as
wireless products. For the year, DSP revenue increased 16 percent
due to demand for wireless products. In 2006, about 40 percent of
total Semiconductor revenue came from DSP.
- In the fourth quarter, TI’s remaining Semiconductor revenue
was 2 percent higher than the prior quarter due to higher royalties.
Revenue was lower for RISC microprocessors, DLP products, standard
logic products and microcontrollers. TI’s remaining Semiconductor
revenue increased 5 percent from the year-ago quarter due to higher
royalties and standard logic revenue. Revenue from RISC microprocessors,
DLP products and microcontrollers was about even with the year-ago
quarter. For the year, TI’s remaining Semiconductor revenue
increased 14 percent as growth in standard logic products, DLP products,
RISC microprocessors and microcontrollers more than offset a decline
in royalties.
- In the fourth quarter, gross profit was $1.73 billion, or 51.1 percent
of revenue. This was a decrease of $113 million from the prior quarter
due to lower revenue and an increase of $85 million from the year-ago
quarter primarily due to lower depreciation. For the year, gross profit
was $7.05 billion, or 51.3 percent of revenue. This was an increase
of $1.28 billion, or 22 percent, due to higher revenue, as well as lower
depreciation.
- In the fourth quarter, operating profit was $908 million, or 26.8
percent of revenue. This was a decline of $100 million from the prior
quarter due to lower gross profit. Operating profit was about even with
the year-ago quarter. For the year, operating profit was $3.83 billion,
or a record 27.9 percent of revenue. This was an increase of $1.02 billion
due to higher gross profit.
- Semiconductor orders were $3.00 billion. This was a decrease of 9
percent from the prior quarter and 12 percent from the year-ago quarter
due to lower demand for DSP and DLP products. For the year, Semiconductor
orders were $13.49 billion. This was an increase of 9 percent due to
higher demand for analog products.
Semiconductor Highlights
- TI announced “eCosto,” a single-chip cell-phone technology
that will lower the system costs of advanced multimedia phones, making
them more affordable for the mass market. The first product in the new
“eCosto” platform integrates an OMAP™ applications
processor and the modem function, using TI’s differentiated digital
RF processor (DRP™) technology. The product will be manufactured
using a 65-nanometer CMOS process and will support the GSM, GPRS and
EDGE wireless standards.
- TI began sampling four new DaVinci™ processors specifically
tuned for the automotive, video security and video telephony markets.
The DSP-based digital media processors offer improved video performance
with a 50 percent cost reduction over previous generations of TI’s
digital media processors.
- TI introduced two new high-performance analog precision operational
amplifiers for the high-voltage industrial market. The first devices
developed with TI’s BiCom3HV silicon germanium process technology,
these 36-volt amplifiers deliver significant improvements in power consumption,
bandwidth and package size.
Education Technology
- In the fourth quarter, revenue was $78 million. This was a decrease
of $104 million from the prior quarter due to the seasonal decline for
graphing calculators with the end of the back-to-school season. It was
an increase of $11 million from the year-ago quarter due to stronger
demand for graphing calculators. For the year, revenue was $525 million.
This was a 4 percent increase due to higher demand for graphing calculators.
- In the fourth quarter, gross profit was $45 million, or 57.7 percent
of revenue. Gross profit decreased $71 million from the prior quarter
due to lower revenue, and increased $10 million from the year-ago quarter
primarily due to higher revenue. For the year, gross profit of $321
million, or a record 61.1 percent of revenue, increased $21 million
primarily due to higher revenue, as well as product cost reductions.
- In the fourth quarter, operating profit was $19 million, or 23.9 percent
of revenue. This was a decrease of $64 million compared with the prior
quarter due to lower gross profit. It was an increase of $9 million
from the year-ago quarter due to higher gross profit. For the year,
operating profit was $200 million, or a record 38.0 percent of revenue.
This was an increase of $12 million due to higher gross profit.
###
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generally can be identified by phrases such as TI or its management “believes,”
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We urge you to carefully consider the following important factors that
could cause actual results to differ materially from the expectations
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electronics and computing;
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its ability to utilize its manufacturing facilities at sufficient levels
to cover its fixed operating costs, in an intensely competitive and
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in a rapidly changing technological environment;
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and amount of distributor and other customer inventory adjustments;
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- Product liability or warranty claims, or recalls by TI customers for
a product containing a TI part;
- TI’s ability to recruit and retain skilled personnel; and
- Timely implementation of new manufacturing technologies, installation
of manufacturing equipment and the ability to obtain needed third-party
foundry and assembly/test subcontract services.
For a more detailed discussion of these factors, see the text under the
heading “Risk Factors” in Item 1A of the Company’s most
recent Form 10-K. The forward-looking statements included in this release
are made only as of the date of publication, and the Company undertakes
no obligation to update the forward-looking statements to reflect subsequent
events or circumstances.
Texas Instruments Incorporated provides innovative DSP and analog technologies
to meet our customers’ real world signal processing requirements.
In addition to Semiconductor, the company includes the Education Technology
business. TI is headquartered in Dallas, Texas, and has manufacturing,
design or sales operations in more than 25 countries.
Texas Instruments is traded on the New York Stock Exchange under the
symbol TXN. More information is located on the World Wide Web at www.ti.com.
TI Trademarks:
DLP
OMAP
DRP
DaVinci
Other trademarks are the property of their respective owners.
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