On Monday, broad-line semiconductor designer Texas Instruments (NYSE:TXN) released third-quarter 2006 earnings for the period ended Sept. 30.

  • Despite lower gross margins, the company squeezed out more net income per dollar of sales than last year.
  • The weak spot here is the cash flow statement. Management just didn't have much spare capital to work with in this quarter, cramping the company's style in the expansion department.
  • Still, that didn't stop another round of hefty share repurchases. It's always good to see a substantial reduction in share count, particularly in combination with better raw earnings. Texas Instruments had both this time around, signaling a certain level of management optimism.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q3 2006

Q3 2005

Change

Sales

$3,800

$3,761.0

$3,339.0

12.6%

Net Profit

--

$686.0

$596.0

15.1%

EPS

$0.45

$0.45

$0.36

25.0%

Diluted Shares

1,537.0

1,663.0

(7.6%)


Get back to basics with a look at the income statement.

Margin Checkup

Q3 2006

Q3 2005

Change*

Gross Margin

51.37%

53.07%

(1.70)

Operating Margin

24.73%

22.79%

1.94

Net Margin

18.24%

17.85%

0.39
*Expressed in percentage points

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2006

Q3 2005

Change

Cash + ST Invest.

$4,175.0

$5,246.0

(20.4%)

Accounts Rec.

$2,089.0

$1,756.0

19.0%

Inventory

$1,491.0

$1,074.0

38.8%

Liabilities

Q3 2006

Q3 2005

Change

Accounts Payable

$744.0

$755.0

(1.5%)

Long-Term Debt

$0.0

$55.0

(100.0%)


Learn the ways of the balance sheet.

Cash Flow Highlights

Q3 2006

Q3 2005

Change

Cash From Ops.

$419.0

$1,464.0

(71.4%)

Capital Expenditures

$276.0

$440.0

(37.3%)

Free Cash Flow

$143.0

$1,024.0

(86.0%)


Find out why Fools always follow the money.

Related companies:

  • Broadcom (NASDAQ:BRCM)
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  • Marvell (NASDAQ:MRVL)
  • National Semiconductor (NYSE:NSM)
  • Analog Devices (NYSE:ADI)
  • Fairchild Semiconductor (NYSE:FCS)

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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Anders Bylund had no positions in companies mentioned in this story. Fool rules are here.