Texas Instruments Inc. Earnings Cheat Sheet: Margins Suffer as Costs Rise, Profit Falls

S&P 500 (NYSE:SPY) component Texas Instruments Inc. (NYSE:TXN) reported its results for the second quarter. Texas Instruments, Inc. designs and makes semiconductors that it sells to electronics designers and manufacturers all over the world.

Get more Earnings Cheat Sheets with our in depth coverage of earnings season >>

Texas Instruments Earnings Cheat Sheet for the Second Quarter

Results: Net income for the semiconductor company fell to $672 million (56 cents per share) vs. $769 million (62 cents per share) a year earlier. This is a decline of 12.6% from the year earlier quarter.

Revenue: Fell 1% to $3.46 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: TXN beat the mean analyst estimate of 53 cents per share. Analysts were expecting revenue of $3.44 billion.

Quoting Management: “We are pleased with the continued success of the TI portfolio in Analog and Embedded Processing. Sequential revenue growth was driven by Embedded Processing up 12 percent and Analog up three percent, andwe believe we again gained market share in both segments,” said Rich Templeton, TI’s chairman, president and chief executive officer. “In the quarter, we also resumed production ahead of schedule at our Japan factories that were damaged in the earthquake, thanks to excellent work by our teams on the ground.”

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the first quarter, net income rose 1.2% from the year earlier, while the figure increased 43.8% in the fourth quarter of the last fiscal year, 59.7% in the third quarter of the last fiscal year and more than twofold in the second quarter of the last fiscal year.

A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the second quarter of the last fiscal year, which saw revenue rise 42.3%.

Gross margin shrank 3.5 percentage points to 50.7%. The contraction appeared to be driven by increased costs, which rose 6.4% from the year earlier quarter while revenue fell 1%.

The company topped expectations last quarter after falling short of forecasts in the first quarter with net income of 57 cents versus a mean estimate of net income of 58 cents per share.

Competitors to Watch: National Semicond. Corp. (NYSE:NSM), Analog Devices, Inc. (NYSE:ADI), Intersil Corporation (NASDAQ:ISIL), Linear Technology Corp. (NASDAQ:LLTC), ON Semiconductor Corp. (NASDAQ:ONNN), Intel Corporation (NASDAQ:INTC), STMicroelectronics N.V. (NYSE:STM), Maxim Integrated Products Inc. (NASDAQ:MXIM), Broadcom Corporation (NASDAQ:BRCM), and Marvell Tech. Group Ltd. (NASDAQ:MRVL).

Get more Earnings Cheat Sheets with our in depth coverage of earnings season >>

(Source: Xignite Financials)

More from The Cheat Sheet