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No Recession for Texas Instruments: Fool by Numbers

On Jan. 22, broad-line semiconductor designer Texas Instruments (NYSE: TXN  ) released earnings for the 2007 fiscal year -- a period ended Dec. 31, 2007.

  • Generous share buybacks turned flat earnings growth into a very nice ramp-up on a per-share basis. Management explains that the leaner, meaner asset-light manufacturing model that was implemented a couple of years ago simply doesn't call for a lot of infrastructure investments -- so the cash is pumped back to shareholders instead.
  • TI customers clamored for high-margin digital signal processors and analog chips, which helped to drive gross margins wider.
  • The company didn't tell us how much of these results came from international markets, but in 2006, U.S. sales accounted for only 13% of total revenue. Thus TI joins Intel (Nasdaq: INTC  ) and IBM (NYSE: IBM  ) in the recession-insulated international club.
  • The P/E ratio may look lofty, but TI backs it up with rambunctious cash flow growth, which gives you a better valuation basis.

(Figures in millions, except per-share data)

Income Statement Highlights

FY 2007

FY 2006






Net Profit, Cont. Ops




EPS, Cont. Ops




Diluted Shares




Get back to basics with the income statement.

Margin Checkup

FY 2007

FY 2006


Gross Margin




Operating Margin




Net Margin, Cont. Ops




*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights


FY 2007

FY 2006


Cash + ST Invest.




Accounts Rec.









FY 2007

FY 2006


Accounts Payable




Long-Term Debt




The balance sheet reflects the company's health.

Cash Flow Highlights

FY 2007

FY 2006


Cash From Ops.




Capital Expenditures




Free Cash Flow




Owner Earnings




Free cash flow is a Fool's best friend.

Competitive Context

Market Cap

Trailing P/E Ratio

CAPS Rating (out of 5)

Qualcomm (Nasdaq: QCOM  )




Texas Instruments




Analog Devices (NYSE: ADI  )




STMicroelectronics NV (NYSE: STM  )




National Semiconductor (NYSE: NSM  )




Using the latest reported numbers from Capital IQ. Keep your partners close and the competition in your vest pocket.

Related Foolishness:

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Anders Bylund

Anders Bylund is a Foolish Technology and Entertainment Specialist. Where the two markets intersect, you'll find his wheelhouse. He has been an official Fool since 2006 but a jester all his life.

Hypoallergenic. Contains six flavors not found in nature. Believes in coyotes and time as an abstract.

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