TI Reports Third Quarter 2024 Financial Results and Shareholder Returns

Texas Instruments (TI) has reported its third quarter 2024 financial results, providing insights into the company's performance and shareholder returns. The semiconductor industry has witnessed a recovery from a cyclical downturn, led by the surge in demand for artificial intelligence chips and a modest recovery in the personal computer market. However, TI has faced some headwinds as major customers scaled back on purchases.

TI's revenue for the quarter is expected to decline by about 10% year-over-year to $4.14 billion, coming in slightly ahead of estimates. Earnings are likely to come in at $1.38 per share, roughly in line with estimates. The company's product lineup, which includes analog semiconductors and embedded systems, is seen to be more dependent on macroeconomic factors compared to other parts of the semiconductor industry.

TI's margins have faced pressure, with gross margin contracting almost 600 basis points to 58% over the last quarter. This was impacted by the smaller revenue base as well as slightly higher production costs associated with reduced factory utilization. The company's capital expenditure reduction and free cash flow increase have impacted its Q3 2024 earnings and shareholder returns.

TI's board of directors has declared a quarterly cash dividend of $1.36 per share of common stock, payable on November 12, 2024, to stockholders of record as of October 31, 2024. This dividend represents a continuation of the company's commitment to shareholder returns and is consistent with TXN's history of reliable dividends.

TI's capital expenditure and R&D spending in Q3 2024 are expected to contribute to future growth. The company's investment in 300mm wafer fabrication capacity in the U.S. helps reduce geopolitical risks and improves long-term competitiveness. TI's third quarter outlook is for revenue in the range of $3.94 billion to $4.26 billion and earnings per share between $1.24 and $1.48.