Texas Instruments Inc. (
TXN)
Q4 2009 Earnings Call Transcript
January 25, 2010 5:30 p.m. ET
Executives
Ron Slaymaker - Vice President, Investor Relations
Kevin P. March - Senior Vice President, Chief Accounting Officer and Chief Financial Officer
Analysts
Uche Orji - UBS
John Pitzer - Credit Suisse
Tristan Gerra - Robert W. Baird & Co., Inc.
David Wu - GC Research Ltd.
Edward Snyder - Charter Equity Research
John Barton - Cowen And Company
David Long - Wells Fargo
Ross Seymore - Deutsche Bank Securities
James Covello - Goldman Sachs
Stacy Rasgon - Sanford C. Bernstein
Srini Pajjuri - CLSA
Craig Berger - FBR Capital Markets & Co.
Doug Freedman - Broadpoint AmTech
Glen Yeung - Citigroup
Christopher Danely - J.P. Morgan
Presentation
Ron Slaymaker
Good afternoon. And thank you for joining our Fourth Quarter and Year 2009 Earnings Conference Call. As usual, Kevin March, TI''s CFO is with me today. For any of you that missed the release, you can find it in our website at ti.com/ir. This call being broadcast live over the web and can be accessed through TI''s website. A replay will be available through the web.
This call will include forward-looking statements that involve risk factors that could cause TI''s results to differ materially from managements current expectations. We encourage you to review the Safe Harbor statement contained in the earnings release published today, as well as, TI''s most recent SEC filings for a complete description.
Our mid quarter update to our outlook is scheduled this quarter for March 8th. We expect to narrow or adjust the revenue and earnings guidance ranges as appropriate with this update.
In today''s call, we''ll address growth, what''s driving it, and is it sustainable? We will also address inventories and provide our perspective on where they stand today in the supply chain. Finally, we''ll discuss actions that we are taking today to support continued growth in the future.
Revenue in the fourth quarter was near the high-end of our range of expectations. Earnings exceeded the top end of our range of expectations. Sequential growth began in the second quarter of 2009, as our shipments normalized to customers production levels, following a sharp inventory correction.
We believe growth is now being fueled by expanding production at our customers. Inventories through TI''s and our customers supply chains are lean and growing end demand is stressing the entire supply chain.
Let''s start with breaking down the fourth quarter revenue trends. Overall revenue was up 4% sequentially or 21% from a year ago. Sequentially, our calculator revenue seasonally declined by $116 million.
Our semiconductor revenue, therefore, grew about 9% sequentially. Our analog, embedded processing and wireless segments all contributed to sequential growth, while the other segments declined due to the lower calculator revenue.
Analog revenue grew 9% sequentially and was up 27% from the year ago quarter. Again, this quarter we had good contributions by all three of our major analog product areas to this growth.
I described last quarter our high expectations for the long-term opportunity that we have in the power management area of analog. Power was the fastest growth part of analog for TI this quarter, as we penetrated new opportunities and gained share.
Specifically, growth was strong in power supply for computing applications, an area where our share is rapidly expanding in a strong market. We also had strength in displays, specifically LCD TVs, as higher frame rates, LED backlighting and power efficiency become more important. As we saw strength in notebooks and smartphones and for TI, these are products such as white LED drivers and battery gauges.
In HVAL, automotive was the fastest growing area sequentially and in HPA, low power wireless products were the fastest growing.
Embedded processing revenue grew 5% sequentially and was up 21% from a year ago. Catalog products were the biggest driver of this growth, followed by automotive. Embedded processing should continue to benefit as the industrial market strengthens.
