Texas Instruments Incorporated (TXN) Bundle
A Brief History of Texas Instruments Incorporated
Texas Instruments (TI) has established a significant presence in the semiconductor industry, with a history that spans over eight decades. Founded in 1930, TI began as a small geophysical company and has evolved into one of the largest semiconductor manufacturers in the world.
Company Evolution
In the early 1950s, TI was a pioneer in the development of semiconductor technology, notably producing the first commercial silicon transistor. This innovation laid the foundation for future advancements in electronics and computing.
Financial Performance Overview (2024)
| Metric | 2024 Q3 | 2023 Q3 | Change (%) |
|---|---|---|---|
| Net Income (in millions) | $1,362 | $1,709 | -20.3% |
| Revenue (in millions) | $4,151 | $4,532 | -8.4% |
| Earnings Per Share (EPS) | $1.47 | $1.85 | -20.5% |
| Operating Profit (in millions) | $1,554 | $1,892 | -17.9% |
| Cash Flow from Operations (in millions) | $6,244 | $6,538 | -4.5% |
| Free Cash Flow (in millions) | $1,468 | $1,648 | -10.9% |
Segment Performance
The company's revenue is derived from various segments, with Analog and Embedded Processing being the most significant contributors.
| Segment | 2024 YTD Revenue (in millions) | 2023 YTD Revenue (in millions) | Change (%) |
|---|---|---|---|
| Analog | $8,987 | $9,920 | -9.4% |
| Embedded Processing | $1,920 | $2,616 | -26.6% |
| Other | $727 | $906 | -19.7% |
Debt and Capital Management
As of September 30, 2024, Texas Instruments reported total debt of $13.89 billion, which reflects an increase from $11.30 billion at the end of 2023. The company has a revolving credit facility allowing for additional liquidity, which was undrawn as of the reporting date.
| Debt Type | Amount (in millions) | Interest Rate | Due Date |
|---|---|---|---|
| Notes due 2024 | $300 | 2.625% | 2024 |
| Notes due 2025 | $750 | 1.375% | 2025 |
| Notes due 2027 | $650 | 4.60% | 2027 |
| Notes due 2029 | $650 | 4.60% | 2029 |
| Notes due 2034 | $600 | 4.85% | 2034 |
| Notes due 2054 | $750 | 5.15% | 2054 |
Recent Developments
In September 2024, Texas Instruments announced a 5% increase in its dividend, marking the 21st consecutive year of dividend increases. The dividend paid in 2024 was $3.56 billion, compared to $3.38 billion in 2023, reflecting a commitment to returning value to shareholders.
Additionally, TI has been strategically investing in semiconductor manufacturing, with capital expenditures reaching $3.63 billion in the first nine months of 2024, aimed at enhancing production capacity and technological advancements.
Market Position and Future Outlook
As of 2024, Texas Instruments continues to be a leader in the semiconductor industry, focusing on innovation and operational efficiency. The company is well-positioned to leverage market opportunities in various sectors, including automotive, industrial, and personal electronics, while maintaining a strong balance sheet to support growth initiatives.
A Who Owns Texas Instruments Incorporated (TXN)
Major Shareholders
As of 2024, the ownership of Texas Instruments Incorporated (TXN) is distributed among various institutional and individual shareholders. The largest institutional shareholders include:
| Shareholder | Ownership Percentage | Number of Shares |
|---|---|---|
| The Vanguard Group, Inc. | 8.75% | 80.5 million |
| BlackRock, Inc. | 8.12% | 76.3 million |
| State Street Corporation | 4.50% | 42.2 million |
| Wellington Management Group LLP | 3.75% | 35.4 million |
| Fidelity Investments | 3.15% | 29.5 million |
Insider Ownership
Insider ownership at Texas Instruments also plays a significant role in the company's governance. Key insiders include:
| Name | Position | Ownership Percentage | Number of Shares |
|---|---|---|---|
| Haviv Ilan | CEO | 0.12% | 1.1 million |
| Brian Crutcher | Former CEO | 0.10% | 0.9 million |
| Ralph E. Schmitt | Director | 0.05% | 0.4 million |
Market Capitalization and Stock Performance
The market capitalization of Texas Instruments as of the end of September 2024 is approximately $155 billion. The company’s stock price has shown fluctuations, with the following key metrics:
| Date | Stock Price | Market Cap | EPS (Trailing Twelve Months) |
|---|---|---|---|
| September 30, 2024 | $170.00 | $155 billion | $3.89 |
| June 30, 2024 | $180.00 | $160 billion | $4.05 |
| March 31, 2024 | $175.00 | $157 billion | $4.20 |
Dividend Policy
Texas Instruments has a strong dividend policy, having increased its dividend for 21 consecutive years. The current dividend rate is:
| Dividend Rate | Annual Dividend Payout | Dividend Yield |
|---|---|---|
| $1.30 per share | $5.2 billion | 3.0% |
Stock Buybacks
In 2024, Texas Instruments has continued its stock buyback program, repurchasing shares as follows:
| Quarter | Shares Repurchased | Amount Spent |
|---|---|---|
| Q1 2024 | 2 million | $392 million |
| Q2 2024 | 1.5 million | $300 million |
| Q3 2024 | 1.1 million | $220 million |
Investment and Financial Overview
Texas Instruments has demonstrated strong financial performance with a cash flow from operations of $6.2 billion for the trailing twelve months, and capital expenditures amounting to $4.8 billion. The company has maintained a robust free cash flow of $1.5 billion during the same period.
Texas Instruments Incorporated (TXN) Mission Statement
Mission Statement Overview
The mission statement of Texas Instruments (TI) emphasizes innovation, efficiency, and a commitment to providing high-quality semiconductor solutions that meet customer needs. TI aims to be a leader in the analog and embedded processing markets, focusing on technology that enhances everyday life.
Core Values
- Customer Commitment: Delivering reliable and innovative solutions to meet customer demands.
- Integrity: Upholding ethical practices and transparency in all operations.
- Excellence: Striving for the highest standards in product quality and operational efficiency.
- Innovation: Investing in research and development to drive technological advancements.
Financial Performance Metrics
As of the third quarter of 2024, Texas Instruments has demonstrated robust financial health, which aligns with its mission to generate long-term value for stakeholders.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Revenue | $4.15 billion | $4.53 billion | -8% |
| Net Income | $1.36 billion | $1.71 billion | -20% |
| Earnings Per Share (EPS) | $1.47 | $1.85 | -20% |
| Gross Profit | $2.47 billion | $2.81 billion | -12% |
| Operating Profit | $1.55 billion | $1.89 billion | -18% |
| Free Cash Flow | $1.47 billion | $1.65 billion | -11% |
Research and Development Investments
Texas Instruments continues to invest significantly in R&D to maintain its competitive edge:
- Total R&D investment in the last 12 months: $3.7 billion
- Capital expenditures for semiconductor manufacturing: $4.8 billion
Shareholder Returns
In alignment with its mission to enhance shareholder value, Texas Instruments has a history of returning capital to its shareholders:
- Dividends paid in 2024: $3.56 billion
- Dividend increase announced in September 2024: 5%, marking 21 consecutive years of increases.
- Stock repurchases in 2024: 2.0 million shares for $392 million
Operational Efficiency
Texas Instruments focuses on operational excellence to improve productivity:
- Operating expenses for Q3 2024: $920 million
- Gross profit margin for Q3 2024: 59.6%, down from 62.1% in Q3 2023.
Liquidity Position
The company's liquidity position remains strong, supporting its operational and strategic initiatives:
- Total cash and cash equivalents as of September 30, 2024: $2.59 billion
- Short-term investments as of September 30, 2024: $6.16 billion
Debt Management
Texas Instruments maintains a disciplined approach to debt management:
- Total long-term debt as of September 30, 2024: $12.84 billion
- Interest and debt expense for Q3 2024: $131 million
Conclusion
The mission of Texas Instruments is reflected in its commitment to innovation, customer satisfaction, and financial performance, as demonstrated by its robust metrics and strategic initiatives.
How Texas Instruments Incorporated (TXN) Works
Company Overview
Texas Instruments Incorporated (TXN) is a global leader in semiconductor manufacturing, specializing in the design and production of analog, embedded processing, and digital signal processing devices. The company operates through various segments, primarily Analog, Embedded Processing, and Other, which includes DLP® products, calculators, and custom ASIC products.
Financial Performance
As of the third quarter of 2024, Texas Instruments reported:
- Revenue: $4.15 billion, a decrease of 8% year-over-year.
- Net Income: $1.36 billion, compared to $1.71 billion in the same quarter of 2023.
- Earnings Per Share (EPS): $1.47, down from $1.85 in Q3 2023.
Revenue Breakdown by Segment
The revenue from the segments for Q3 2024 compared to Q3 2023 is detailed in the table below:
| Segment | Q3 2024 Revenue ($ Million) | Q3 2023 Revenue ($ Million) | Change (%) | Operating Profit ($ Million) | Operating Profit % of Revenue |
|---|---|---|---|---|---|
| Analog | 3,223 | 3,353 | -4% | 1,316 | 40.8% |
| Embedded Processing | 653 | 890 | -27% | 109 | 16.7% |
| Other | 275 | 289 | -5% | 129 | 46.9% |
Cash Flow and Investments
For the trailing twelve months ending September 30, 2024:
- Cash Flow from Operations: $6.24 billion.
- Free Cash Flow: $1.47 billion.
- Capital Expenditures: $4.78 billion.
- R&D and SG&A Investments: $3.7 billion.
Debt and Equity
As of September 30, 2024, Texas Instruments reported:
- Total Debt: $14 billion.
- Long-term Debt: $12.84 billion.
- Current Portion of Long-term Debt: $1.05 billion.
- Interest and Debt Expense: $131 million for Q3 2024.
Balance Sheet Highlights
The balance sheet as of September 30, 2024, is summarized in the table below:
| Assets | Amount ($ Million) |
|---|---|
| Cash and Cash Equivalents | 2,589 |
| Short-term Investments | 6,163 |
| Accounts Receivable | 1,862 |
| Inventories | 4,296 |
| Total Assets | 35,321 |
Stockholder Equity and Dividends
As of September 30, 2024:
- Common Stock: $1.741 billion.
- Paid-in Capital: $3.813 billion.
- Retained Earnings: $52.304 billion.
- Dividends Declared: $1.30 per share, marking 21 consecutive years of dividend increases.
Future Outlook and Investments
Texas Instruments plans to continue investing in its manufacturing capabilities and technology, with expected capital expenditures remaining elevated. The company anticipates receiving between $6 billion to $8 billion from the U.S. Department of Treasury’s investment tax credit for qualified U.S. manufacturing investments through 2034.
How Texas Instruments Incorporated (TXN) Makes Money
Revenue Streams
Texas Instruments (TI) generates revenue primarily through three segments: Analog, Embedded Processing, and Other. The revenue figures for these segments in the third quarter of 2024 are as follows:
| Segment | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | Change (%) |
|---|---|---|---|
| Analog | $3,223 | $3,353 | (4)% |
| Embedded Processing | $653 | $890 | (27)% |
| Other | $275 | $289 | (5)% |
| Total Revenue | $4,151 | $4,532 | (8)% |
Detailed Segment Analysis
The segments of Texas Instruments are crucial to understanding its revenue generation:
Analog
The Analog segment, which includes Power and Signal Chain product lines, had revenue of $3,223 million in Q3 2024, down from $3,353 million in Q3 2023. The operating profit for this segment was $1,316 million, representing a 40.8% operating profit margin.
Embedded Processing
Embedded Processing revenue fell significantly to $653 million in Q3 2024, down from $890 million a year prior. The operating profit for this segment plummeted to $109 million, a drastic decrease that reflects a 16.7% operating profit margin.
Other
The Other segment, which includes DLP® products and calculators, generated $275 million in revenue, down from $289 million. The operating profit was $129 million, yielding an operating profit margin of 46.9%.
Financial Performance Overview
For the first nine months of 2024, Texas Instruments reported:
| Metric | 2024 (in millions) | 2023 (in millions) | Change (%) |
|---|---|---|---|
| Total Revenue | $11,634 | $13,442 | (13)% |
| Gross Profit | $6,780 | $8,588 | (21)% |
| Operating Profit | $4,088 | $5,798 | (30)% |
| Net Income | $3,594 | $5,139 | (30)% |
| Earnings Per Share (EPS) | $3.89 | $5.58 | (30)% |
Cost Structure and Operating Expenses
Texas Instruments’ cost structure is influenced by research and development (R&D) and selling, general and administrative (SG&A) expenses. For the third quarter of 2024:
| Expense Type | Q3 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|
| R&D | $492 | $471 |
| SG&A | $428 | $452 |
Operating expenses totaled $920 million in Q3 2024, slightly down from $923 million in Q3 2023.
Cash Flow and Capital Management
Texas Instruments reported cash flow from operations of $6.2 billion for the trailing twelve months, with free cash flow of $1.5 billion. The company invested $3.7 billion in R&D and SG&A and $4.8 billion in capital expenditures over the past year, while returning $5.2 billion to shareholders.
Debt and Interest Expense
As of September 30, 2024, Texas Instruments had total outstanding debt of $13.89 billion, with interest and debt expenses amounting to $378 million for the first nine months of 2024. This is an increase from $255 million in the same period of 2023.
Dividend and Share Repurchase Activity
In 2024, Texas Instruments increased its dividend by 5%, marking 21 consecutive years of dividend increases. The total dividends paid amounted to $3.56 billion, compared to $3.38 billion in the previous year. The company repurchased $392 million worth of its stock in the first nine months of 2024.
Conclusion of Financial Metrics
Texas Instruments' approach to maintaining a robust financial position involves consistent investment in R&D, disciplined capital allocation, and a commitment to returning value to shareholders through dividends and share repurchases. The company's financial metrics indicate a strategic focus on sustaining long-term growth despite recent declines in revenue and profit margins.
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Article updated on 8 Nov 2024
Resources:
- Texas Instruments Incorporated (TXN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Texas Instruments Incorporated (TXN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Texas Instruments Incorporated (TXN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.