Texas Instruments Incorporated Q3 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Q3 revenue was $5.2 billion, up 1% sequentially and 13% year-over-year.
  • Segment performance year-over-year:
    • Analog: +13%
    • Embedded Processing: +11%
    • Other: +20%
  • Gross profit rose to $3.6 billion (69% margin), up 110 bps from Q3 2021.
  • Operating profit was $2.7 billion (51% margin), up 16% year-over-year.
  • Net income was $2.3 billion; EPS of $2.47 included a $0.02 benefit from items not in prior guidance.

Market Performance (Sequential)

  • Personal electronics: Down mid-teens; continued weakness from Q2.
  • Industrial: About flat; weakness beginning to broaden across sub-markets.
  • Automotive: Up ~10%; remains the strongest end market.
  • Communications equipment: Up high single-digits.
  • Enterprise systems: Up mid single-digits.

Outlook for Q4 2022

  • Revenue expected between $4.4 billion and $4.8 billion.
  • EPS expected between $1.83 and $2.00.
  • Most end markets expected to decline sequentially, except automotive.
  • Effective tax rate expected to remain near 14% for 2022; likely higher in 2023 without tax law changes.

Capital Management & Financial Condition

  • Cash flow from operations: $2.8 billion in Q3.

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Dave Pahl: Welcome to the Texas Instruments Third Quarter 2022 Earnings Release Conference Call. I am Dave Pahl, Head of Investor Relations and I am joined by our Chief Financial Officer, Rafael Lizardi. For any of you who missed the release, you can find it on our website at ti.com/ir. This call is being broadcast live over the web and can be accessed through our website. In addition, today’s call is being recorded and you will be able to get it via replay on our website. This call will include forward-looking statements that involve risks and uncertainties that could cause TI’s results to differ materially from management’s current expectations. We encourage you to review the notice regarding forward-looking statements contained in the earnings release published today as well as TI’s most recent SEC filings for a more complete description. Today, we will provide the following updates. First, I will start with a quick overview of the quarter. Next, I will provide insight into third quarter’s revenue results with some details of what we are seeing with respect to our customers and markets. And lastly, Rafael will come to results and our guidance for the fourth quarter of 2022. Starting with a quick overview of the third quarter, revenue in the quarter came in about as expected at $5.2 billion, an increase of 1% sequentially and 13% year-over-year. Analog revenue grew 13%, Embedded Processing grew 11%, and our Other segment grew 20% from the year ago quarter. Now I’ll provide

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