Texas Instruments Incorporate (NASDAQ: TXN) rose over 3.9% on April 25th, 2018 after the company posted better than expected results for the first quarter of FY 18. The company did not increase its dividend of 62 cents per share for the first quarter. TXNs also said that its tax rate will be lower than expected in the coming years, which had a positive impact on its stock late in the day.
TXN in the first quarter of FY 18 has reported the adjusted earnings per share of $1.35, beating the analysts’ estimates for the adjusted earnings per share of $1.11. The company had reported the adjusted revenue growth of 11 percent to $3.79 billion in the first quarter of FY 18, beating the analysts’ estimates for revenue of $3.65 billion. The revenue grew as demand for the products remained strong in the industrial and automotive markets. In the company’s core businesses, analog revenue grew 14% and Embedded processing revenue grew 15% compared with the same quarter a year ago. Operating margin has increased in both businesses.
Moreover, in the first quarter, the cash flow from operations was $1.1 billion. The free cash flow for the trailing twelve-month period was $4.9 billion, which is an increase of 17% from a year ago. Free cash flow margin for the same period was 32.1% of revenue, up from 30.7% a year ago. The company continues to benefit from the quality of the product portfolio that is long-lived and diverse, and the efficiency of the manufacturing strategy, the latter of which includes the growing 300mm analog output.
In addition, in the first quarter of 2018, TXN had about $140 million of tax benefits that were not in the original guidance. These include $50 million due to stock-based compensation, $50 million due to updated estimates related to the tax reform law, and $40 million primarily due to the previously described decrease in the tax rate for 2018.
For the trailing twelve-month period, TXN has returned $5.1 billion of cash to owners through a combination of dividends and stock repurchases.
TXN expects for second-quarter earnings to be in the range of $1.19 per share to $1.39 per share and revenue to be in the range of $.378 billion to $4.1 billion. The analysts are expecting earnings of $1.23 per share and revenue of $3.9 billion