On Jan. 22, semiconductor stalwart Texas Instruments
- The income growth didn't exactly set the world on fire, but cash flows and owner earnings did much better. Management then turned around and gave that cash back -- plus $3 billion from the sale of its sensors and controls division -- to shareholders in the form of $5.3 billion in share-repurchase programs over the interceding year. The result is a healthy-looking 12.5% EPS boost.
- Margins remained fairly stable, in spite of the well-documented product-mix troubles at the major cell phone manufacturers. TI management points to a flexible, partly outsourced manufacturing model as the saving grace.
- The cash conversion cycle lengthened considerably (a bad thing), because of a combination of higher inventory levels and lower payables.
(Figures in millions, except per-share data)
Income Statement Highlights
|
Q4 2006 |
Q4 2005 |
Change |
|
|---|---|---|---|
|
Sales |
$3,463 |
$3,324 |
4.2% |
|
Net Profit |
$668 |
$655 |
2.0% |
|
EPS |
$0.45 |
$0.40 |
12.5% |
|
Diluted Shares |
1499 |
1643 |
(8.8%) |
Get back to basics with a look at the income statement.
Margin Checkup
|
Q4 2006 |
Q4 2005 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
50.5% |
49.9% |
0.6 |
|
Operating Margin |
22.2% |
22.9% |
(0.7) |
|
Net Margin |
19.3% |
19.7% |
(0.4) |
Margins are the earnings engine. See how they work.
Management Effectiveness
|
Q4 2006 |
Q4 2005 |
Change* |
|
|---|---|---|---|
|
Return on Assets |
20.9% |
19.1% |
1.8 |
|
Return on Equity |
25.6% |
24.1% |
1.6 |
See how management puts its financial tools to work.
Balance Sheet Highlights
|
Assets |
Q4 2006 |
Q4 2005 |
Change |
|---|---|---|---|
|
Cash + ST Investments |
$3,717 |
$5,330 |
(30.3%) |
|
Accounts Receivable |
$1,774 |
$1,648 |
7.6% |
|
Inventory |
$1,437 |
$1,185 |
21.3% |
|
Liabilities |
Q4 2006 |
Q4 2005 |
Change |
|---|---|---|---|
|
Accounts Payable |
$560 |
$702 |
(20.2%) |
|
Long-Term Debt |
$0 |
$329 |
N/A |
Learn the ways of the balance sheet.
Cash Flow Highlights
|
Q4 2006 |
Q4 2005 |
Change |
|
|---|---|---|---|
|
Cash From Ops. |
$846 |
$880 |
(3.9%) |
|
Capital Expenditures |
$200 |
$334 |
(40.1%) |
|
Free Cash Flow |
$646 |
$546 |
18.3% |
|
$755 |
$703 |
7.4% |
Find out why Fools always follow the money.
Cash Conversion Checkup
|
Q4 2006 |
Q4 2005 |
Change |
|
|---|---|---|---|
|
Days in Inventory |
68.6 |
57.9 |
10.7 |
|
Days in Receivables |
44.5 |
43.8 |
0.7 |
|
Days Payables Outstanding |
30.1 |
36.8 |
(6.7) |
|
Cash Conversion Cycle |
83.0 |
65.0 |
18.0 |
Read up on cash conversion metrics.
Related Companies:
-
QUALCOMM
(NASDAQ:QCOM) -
Marvell Technology
(NASDAQ:MRVL) -
Atheros Communications
(NASDAQ:ATHR) -
Linear Technology
(NASDAQ:LLTC) -
Maxim Integrated Products
(NASDAQ:MXIM) -
ON Semiconductor
(NASDAQ:ONNN)
Related Foolishness:
- And the Best Small Cap for 2007 Is ...
- The Finest Investment Vehicle Ever Designed
- Foolish Fundamentals: Free Cash Flow
Atheros is an active recommendation in our Motley Fool Hidden Gems newsletter service. Find out more with a free 30-day trial pass, no strings attached.
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 writing, Fool contributor Anders Bylund had no position in any of these companies. Fool rules are here.
