On July 23, broad-line semiconductor maker Texas Instruments
- 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) |
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% |
|
$761 |
$2,364 |
(67.8%) |
Free cash flow is a Fool's best friend.
Related Foolishness:
- Foolish Forecast: Don't Mess With Texas Instruments
- Fool on the Street: Texas Instruments in a Nutshell
- Finding True Value: Discounted Cash Flows
- Texas Instruments Is Misunderstood
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.
