This summary is based on the first quarter fiscal 2008 earnings call conducted by Texas Instruments Inc. (TXN) on April 21, 2008.
Management:
Senior VP and CFO: Kevin March
VP and Manager Investor Relations: Ron Slaymaker
Key Investor Issues:
- Q1 revenues increased by $81 million to $3.27 billion versus last year quarter.
- Quarter EPS were 49 cents versus 35 cents last year quarter.
- The company returned back $1 billion to shareholders in dividends and stock repurchases during the quarter.
- Q2 total revenue is forecast in the range of $3.24 billion to $3.50 billion.
First Quarter Financial Highlights
Compared with the fourth quarter, the revenue declined 8%, primarily due to weaker sales into cell phones, especially the high-end cell phones.
When compared with the prior quarter, revenue decreased by $284 million or 8%.
The quarterly gross profit was $1.76 billion or 53.7% of revenue.
This was an increase of $119 million from a year ago. The management reported that the gross profit declined $170 million from the prior quarter.
The operating profit for the quarter was $807 million, or 24.7% of revenue.
This represented an increase of $127 million from the previous year quarter. Sequentially, operating profit decreased $189 million.
- Other income recorded was $33 million, a decrease of $6 million from the last year quarter and down $13 million from the prior quarter, due to lower interest income.
- The income from continuing operations was $662 million, inclusive of a discrete tax benefit of $81 million associated with the company’s decision to indefinitely re-invest the accumulated earnings of a non-U.S. subsidiary.
- The management reported that income from continuing operations rose $146 million from the past year and dipped $91 million from the prior quarter.
The Q1 orders increased $111 million from year ago quarter to $3.32 billion.
The orders declined $164 million sequentially.
The cash flow from operations was $641 million during the quarter.
This was an increase of $87 million from last year quarter and a decrease of $781 million from the prior quarter.
The operating expenses were $514 million for R&D and $435 million for SG&A during the quarter.
- The R&D expense decreased $38 million from a year ago quarter, as the company continues to benefit from its collaborative work with foundries on advanced digital process technologies.
- R&D expense was about the same as the prior quarter.
- The SG&A expense increased $30 million from the year ago quarter, primarily due to higher investments in field sales and customer support, especially from emerging regions.
- SG&A expense increased $13 million from the prior quarter.
The balance sheet recorded softer debtors and higher inventories.
