Texas Instruments Q4 2024: Key Contradictions in China Market, Inventory Strategy, and Pricing Dynamics

Revenue Decline and Market Performance:
- Texas Instruments reported revenue of $4 billion for Q4 2024, which was a 3% sequential decline and 2% from the same quarter a year ago.
- The decline was due to modest sequential declines in their two largest markets, industrial and automotive, alongside lower-single-digit declines in the industrial market and mid-single-digit declines in automotive.

Embedded Processing Segment Challenges:
- The Embedded Processing segment saw a 18% decline in Q4, while the Analog segment grew by 2% year-over-year.
- The Embedded segment's decline is linked to a later cyclical downturn and underutilization of new manufacturing facilities, which disproportionately affects profitability.

Strong Capital Management and Free Cash Flow:
- Cash flow from operations was $2 billion in the quarter, with capital expenditures at $1.2 billion, and dividends and stock repurchases totaling $1.7 billion.
- The strong capital management was driven by TI's focus on investing in 300-millimeter manufacturing assets and maintaining a balanced approach to capital allocation.

Outlook and Challenges:
- Q1 2025 revenue is expected in the range of $3.74 billion to $4.06 billion, with earnings per share between $0.94 to $1.16.
- The forecast decline is due to lower gross margins, increased operating expenses, and a reduced interest income from lower cash levels and interest rates.