Texas Instruments Incorporated (NASDAQ: TXN) stock lost over 4.9% on 24th October, 2018 (As of 11:07 AM GMT-4; Source: Google finance). In the company’s core businesses, Analog revenue grew 8 percent but Embedded Processing declined 4 percent from the same quarter a year ago. Analog’s revenue grew due to Power and Signal Chain but its High Volume decreased. Operating profit of the segment increased primarily due to higher revenue and associated gross profit. However, Embedded Processing revenue decreased due to Processors and its operating profit decreased primarily due to lower revenue.
The company increased the dividend by 24.19% though the company posted mixed results for the third quarter. The company has also increased the share repurchase authorizations by $12 billion.
TXN in the third quarter of FY 18 has reported the adjusted earnings per share of $1.58, beating the analysts’ estimates for the adjusted earnings per share of $1.53. The company had reported the adjusted revenue growth of 4 percent to $4.26 billion in the third quarter of FY 18, missing the analysts’ estimates for revenue by 0.92%.
The cash flow from operations is of $7.0 billion for the trailing 12 months again underscored the strength of the business model. Free cash flow for the trailing 12 months was $5.9 billion, or 37.5 percent of revenue. This reflects the quality of the product portfolio, as well as the efficiency of the manufacturing strategy, including the benefit of 300-millimeter Analog production.
For the fourth quarter, revenue is expected to be in the range of $3.60 billion to $3.90 billion, and earnings per share is expected to be in the range of $1.14 and $1.34. The company continues to expect the ongoing annual operating tax rate to be about 20 percent in 2018 and about 16 percent starting in 2019.
Meanwhile, TXN has been notified of an unsolicited “mini-tender offer” by TRC Capital Corporation to purchase up to 1,500,000 shares of TI’s common stock, representing approximately 0.15 percent of TI’s outstanding shares. TRC Capital’s offer price of $99.00 represents a 4.14 percent discount to the closing price of TI’s stock on October 5, 2018 ($103.28), the last trading day prior to the date of the offer, and is less than the closing price of $101.09 on October 12, 2018. TI recommends that shareholders reject the offer and not tender their shares in response because the offer is at a price below the current market price for TI shares and is subject to many conditions, including TRC Capital’s right to terminate or amend the offer if the market price of TI stock decreases or TRC Capital fails to obtain necessary financing.