Texas Instruments revenue rises 28% to $6.06 billion; Q4 forecast flat at midpoint

Texas Instruments (Nasdaq: TXN) reported third-quarter revenue of $6.06 billion, up 28% from a year earlier, and forecast fourth-quarter revenue of $5.80 billion to $6.30 billion, according to its earnings release filed on Wednesday.

What happened

Revenue was $6.055 billion, compared with $4.742 billion a year earlier. Operating profit rose 73% to $2.874 billion, net income rose 78% to $2.425 billion, and earnings per share were $2.62, up 77% from $1.48. TI said earnings per share included a 1-cent reduction that was not in its original guidance.

Chairman, President and Chief Executive Haviv Ilan said revenue "increased 11% sequentially and 28% from the same quarter a year ago with continued broad growth in industrial, automotive and data center."

Cash

Cash flow from operations was $3.419 billion in the quarter and $9.896 billion over the trailing 12 months, up 43%. Free cash flow, which TI defines as operating cash flow less capital expenditures plus proceeds from U.S. CHIPS Act incentives, was $2.956 billion in the quarter and $8.422 billion over 12 months, compared with $2.415 billion a year earlier. Ilan said TI invested $2.6 billion in capital expenditures over 12 months and returned $5.8 billion to owners, including $5.174 billion in dividends and $636 million in repurchases.

Outlook

For the fourth quarter, TI forecast revenue of $5.80 billion to $6.30 billion and earnings per share of $2.45 to $2.79. The midpoint of the revenue range, $6.05 billion, is essentially level with the third-quarter figure (computed). The quarterly dividend declared was $1.42 per share, compared with $1.36 a year earlier.

What to watch

TI's guidance range for the fourth quarter is $500 million wide, so the result could land above or below the third quarter.