Chipmaker Texas Instruments (TXN) late Tuesday crushed analyst targets for the fourth quarter and guided higher for the current period. TXN stock jumped in extended trading.
The company, which also beat fourth-quarter revenue estimates, is boosting capacity as chipmakers try to plug the gap between demand and supply caused by the pandemic-fueled supply delays and a shift to working and learning from home.
As demand for electronics including smartphones and consumer gadgets rose faster than expected during the pandemic, semiconductor makers doubled down on production, even as COVID-19 hampered general operations and logistics.
Texas Instrument’s analog and embedded processing chips are used in a wide range of products that cater to a broad market, lowering the risk from dependence on a single customer segment.
Financial Highlights
Revenue increased 19% from the same quarter a year ago driven by strong demand in industrial and automotive markets. Analog revenue grew 20% and Embedded Processing grew 6% from the year-ago quarter.
Our cash flow from operations of $8.8 billion for the year again underscored the strength of our business model. Free cash flow for the year was $6.3 billion and 34% of revenue. This reflects the quality of our product portfolio, as well as the efficiency of our manufacturing strategy, including the benefit of 300-millimeter production.
We returned $4.4 billion to owners in 2021 through dividends and stock repurchases. For the year, our dividend represented 62% of free cash flow, underscoring its sustainability. Together, our dividends and stock repurchases reflect our continued commitment to returning all free cash flow to our owners.
TI’s first-quarter outlook is for revenue in the range of $4.50 billion to $4.90 billion and earnings per share between $2.01 and $2.29. We expect our 2022 annual operating tax rate to be about 14%.
Texas Instruments now plans to bank on opportunities and place “additional strategic emphasis” on the industrial and automotive segments, which roughly account for 41% and 21% of the company’s annual revenue.
About Texas Instruments
Texas Instruments Incorporated (Nasdaq: TXN) is a global semiconductor company that designs, manufactures, tests, and sells analog and embedded processing chips for markets such as industrial, automotive, personal electronics, communications equipment, and enterprise systems.
Our passion to create a better world by making electronics more affordable through semiconductors is alive today, as each generation of innovation builds upon the last to make our technology smaller, more efficient, more reliable, and more affordable – making it possible for semiconductors to go into electronics everywhere. We think of this as Engineering Progress.
Financial Statement
| TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES | ||||||||
| Consolidated Statements of Income | For Three Months Ended
December 31, |
For Years Ended
December 31, |
||||||
| (In millions, except per-share amounts) | 2021 | 2020 | 2021 | 2020 | ||||
| Revenue | $ 4,832 | $ 4,076 | $ 18,344 | $ 14,461 | ||||
| Cost of revenue (COR) | 1,482 | 1,430 | 5,968 | 5,192 | ||||
| Gross profit | 3,350 | 2,646 | 12,376 | 9,269 | ||||
| Research and development (R&D) | 389 | 388 | 1,554 | 1,530 | ||||
| Selling, general and administrative (SG&A) | 404 | 398 | 1,666 | 1,623 | ||||
| Acquisition charges | — | 47 | 142 | 198 | ||||
| Restructuring charges/other | 54 | — | 54 | 24 | ||||
| Operating profit | 2,503 | 1,813 | 8,960 | 5,894 | ||||
| Other income (expense), net (OI&E) | 9 | 162 | 143 | 313 | ||||
| Interest and debt expense | 49 | 48 | 184 | 190 | ||||
| Income before income taxes | 2,463 | 1,927 | 8,919 | 6,017 | ||||
| Provision for income taxes | 325 | 239 | 1,150 | 422 | ||||
| Net income | $ 2,138 | $ 1,688 | $ 7,769 | $ 5,595 | ||||
| Diluted earnings per common share | $ 2.27 | $ 1.80 | $ 8.26 | $ 5.97 | ||||
| Average shares outstanding: | ||||||||
| Basic | 924 | 919 | 923 | 921 | ||||
| Diluted | 936 | 932 | 936 | 933 | ||||
| Cash dividends declared per common share | $ 1.15 | $ 1.02 | $ 4.21 | $ 3.72 | ||||
