Texas Instruments Inc (NASDAQ:TXN), the biggest maker of analog semiconductors, stock fell 5.69% (As on July 26, 1:23:03 AM UTC-4, Source: Google Finance) after the company gave a lukewarm earnings forecast for the current period, indicating that a slump in demand for key types of electronics is dragging on. The company generated cash flow from operations of $7.4 billion for the trailing 12 months again underscored the strength of the business model, the quality of our product portfolio and the benefit of 300-mm production. Free cash flow for the same period was $3.2 billion and 17% of revenue. Over the past 12 months the company had invested $3.6 billion in R&D and SG&A, invested $4.2 billion in capital expenditures and returned $6.5 billion to owners.
TXN in the second quarter of FY 23 has reported the adjusted earnings per share of $1.87, beating the analysts’ estimates for the adjusted earnings per share of $1.76. The company had reported 13 percent fall in the adjusted revenue to $4.53 billion in the second quarter of FY 23, beating the analysts’ estimates for revenue of $4.37 billion. The company’s customers outside of the automotive market continue to cut orders of new chips, relying on existing stockpiles instead, executives said on a conference call with analysts. The chipmaker’s own inventory is on the rise. The balance sheet remains strong with $9.6 billion of cash and short-term investments at the end of the second quarter. In the quarter the company repaid $500 million of debt and issued $1.6 billion of debt. Total debt outstanding was $11.3 billion with a weighted average coupon of 3.5%.
Additionally, the company has declared a quarterly cash dividend of $1.24 per share of common stock, payable August 15, 2023, to stockholders of record on July 31, 2023.
Revenue in the third quarter is expected to be in the range of $4.36 billion to $4.74 billion. The midpoint of that range would come in below the average analyst estimate of $4.59 billion. Profit will be $1.68 to $1.92 a share in the third quarter, Texas Instruments said, compared with a prediction of $1.90.
Like some of its counterparts, Texas Instruments is building new plants — a longer-term bet that semiconductors will become ever more vital to the economy. That’s been cited as a drag on results in the short term. Executives have said that increased spending on new facilities around the company’s Dallas home base will weigh on profitability until they’re in operation.