Texas Instruments (NASDAQ:TXN) just reported results for the second quarter of fiscal 2017. The maker of analog and embedded semiconductors met or exceeded its own guidance across the board, and investors greeted the report with open arms. The next morning, TI shares rose as much as 3.5% on the news.

Here's what you need to know about TI's second quarter.

By the numbers

Metric

Q2 2017

Q2 2016

Year-Over-Year Growth

Revenue

$3.7 billion

$3.3 billion

13%

Free cash flow

$766 million

$911 million

(16%)

Net income

$1.06 billion

$819 million

29%

Earnings per share (diluted)

$1.03

$0.79

20%

Data source: Texas Instruments.

The lower cash flows were a result of $385 million in cash tax payments during the second quarter, compared with $25 million in the year-ago period. Digging one step deeper, the large tax expense was based on TI's higher profit outlook for this fiscal year. That's kind of a nice tax problem to have.

On that note, TI expects revenue to show about 6% annual growth in the third quarter, landing near $3.9 billion. Earnings per diluted share should stop at roughly $1.11 per share. Both of these projections stand comfortably ahead of Wall Street's current estimates, which only call for third-quarter earnings of $1.05 per share on sales in the neighborhood of $3.8 billion.

As usual, TI returned all of its free cash to shareholders -- and more. Dividend payments and net share buybacks added up to $1.06 billion in the second quarter, or 139% of TI's free cash flows. Over the past four quarters, the company generated $4.0 billion of free cash and returned $4.1 billion in the form of dividends and buybacks.

TI's logo, with a red Texas-shaped emblem and the company name in black.

Image source: Texas Instruments.

What's next?

TI showed double-digit sales growth rates in the industrial and automotive computing divisions, driven by strong demand for the company's embedded chips and environment sensors. The company also saw solid increases in personal-electronics solutions and chips for communications equipment, signaling healthy end-user business in TI's most consumer-oriented segments.

Management is pouring more support and resources behind the rapidly growing automotive and industrial operations, so those revenue gains should continue in future quarters.

"This is based on a belief that industrial and automotive will be the fastest growing semiconductor markets because of their increasing semiconductor content, and that they provide diversity and longevity of products, which translate to a high terminal value of the portfolio," said Dave Pahl, Texas Instruments' head of investor relations, on the earnings call.

That's a solid assumption in my book. TI is making all the right moves these days.

Anders Bylund has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.