Calculating Texas Instruments: Fool by Numbers
By Anders Bylund
July 24, 2007
Recommended (4)
On July 23, broad-line semiconductor maker Texas Instruments (NYSE: TXN) released second-quarter earnings for the period ended June 30.
- How can free cash flow balloon, even as net income and owner earnings hit the skids in a big way? Well, the year-ago net income figure includes a $1.7 billion gain from the sale of TI's sensors and controls business. That's not in the year-ago operating cash flow total.
- That's also part of the explanation for the lower revenue, though the company readily admits to lower demand across "a broad base of products."
- Reaping the benefits of its asset-light manufacturing strategy, TI spent $172 million on plants and equipment, versus $374 million a year ago.
(Figures in millions, except per-share data)
Income Statement Highlights
|
Q2 2007
|
Q2 2006
|
Change
|
|
Sales
|
$3,424
|
$3,697
|
(7.4%)
|
|
Net Profit
|
$610
|
$2,387
|
(74.4%)
|
|
EPS
|
$0.42
|
$1.51
|
(72.2%)
|
|
Diluted Shares
|
1,469
|
1,586
|
(7.4%)
|
Get back to basics with the income statement.
Margin Checkup
|
Q2 2007
|
Q2 2006
|
Change*
|
|
Gross Margin
|
52.1%
|
51.6%
|
0.5
|
|
Operating Margin
|
23.6%
|
25.8%
|
(2.2)
|
|
Net Margin
|
17.8%
|
64.6%
|
(46.8)
|
*Expressed in percentage points.
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets
|
Q2 2007
|
Q2 2006
|
Change
|
|
Cash + ST Invest.
|
$3,581
|
$5,670
|
(36.8%)
|
|
Accounts Rec.
|
$1,897
|
$1,929
|
(1.7%)
|
|
Inventory
|
$1,424
|
$1,335
|
6.7%
|
|
Liabilities
|
Q2 2007
|
Q2 2006
|
Change
|
|
Accounts Payable
|
$622
|
$788
|
(21.1%)
|
|
Long-Term Debt
|
$0
|
$0
|
N/A
|
The balance sheet reflects the company's health.
Cash Flow Highlights
|
Q2 2007
|
Q2 2006
|
Change
|
|
Cash From Ops.
|
$898
|
$654
|
37.3%
|
|
Capital Expenditures
|
$174
|
$374
|
(53.5%)
|
|
Free Cash Flow
|
$724
|
$280
|
158.6%
|
|
Owner Earnings
|
$761
|
$2,364
|
(67.8%)
|
Free cash flow is a Fool's best friend.
Related Foolishness:
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 position in any company mentioned. Fool rules are here.
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