Texas Instruments Incorporated (NASDAQ:TXN), one of the world’s largest chipmakers, stock fell 1.46% (As on January 25, 11:46:53 AM UTC-4, Source: Google Finance) after the company suffered its first sales decline since 2020 and gave a tepid forecast for the current quarter, hit by an industry slump. The company has generated  cash flow from operations of $8.7 billion for the year again underscored the strength of the business model. Free cash flow for the year was $5.9 billion and 30% of revenue. This reflects the quality of the product portfolio, as well as the efficiency of the manufacturing strategy, including the benefit of 300-mm production. Over the past 12 months the company has invested $3.4 billion in R&D and SG&A, invested $2.8 billion in capital expenditures and returned $7.9 billion to owners.

TXN in the fourth quarter of FY 22 has reported the adjusted earnings per share of $2.13, beating the analysts’ estimates for the adjusted earnings per share of $1.97. The company had reported 3.4 percent decline in the adjusted revenue to $4.67 billion in the fourth quarter of FY 22, beating the analysts’ estimates for revenue of $4.61 billion.

Additionally, the company has declared a quarterly cash dividend of $1.24 per share of common stock, payable Feb. 14, 2023, to stockholders of record on Jan. 31, 2023. On the other hand, the company’s board of directors has selected Haviv Ilan to become the company’s next president and chief executive officer (CEO), effective April 1. Ilan, a 24-year veteran of TI, succeeds current CEO and president, Rich Templeton, who will transition out of these roles over the next two months but will remain the company’s chairman. The transition is a well-planned succession that follows Ilan’s promotion to senior vice president in 2014, executive vice president and chief operating officer in 2020 and election to the board of directors in 2021.

Revenue in the first quarter is expected to be $4.17 billion to $4.53 billion, compared with an average of analysts’ estimates of $4.41 billion. Profit is expected to be $1.64 to $1.90 a share, versus a prediction of $1.86. The outlook suggests that Texas Instruments may not bounce back quickly from its sales slowdown. Wall Street expects revenue to decline throughout 2023 as the company’s customers focus on reducing their stockpiles of used chips, rather than ordering new ones. Unlike some large technology companies, Texas Instruments has no plans to reduce its headcount to cut costs. The company didn’t get ahead of itself and hire a lot of people during the past two years.