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TEXAS INSTRUMENTS ANNOUNCES RECORD PROFIT, REVENUES

    DALLAS, July 16 /PRNewswire/ -- Texas Instruments Incorporated (NYSE: TXN) today reported its second-quarter 1993 results.
    TI's financial performance continues to strengthen, led by strong improvement in semiconductor operations.  Net income and net revenues reached all-time highs for TI in the second quarter.
    Financial Summary
    Net revenues for the quarter ending June 30, 1993, were $2,105 million, up 13 percent from $1867 million in the second quarter of 1992. Net income was $112 million, compared with $72 million in last year's second quarter.  Earnings per share were $1.18, up 62 percent from $0.73 in the same period of 1992.
    Profit from operations for the quarter was $173 million, compared with $128 million in the second quarter of 1992.  Substantially higher semiconductor profit more than offset a loss in information technology. Defense electronics margins remained stable on lower revenues.
    Second-quarter 1993 results include an accrual of $20 million for employee profit-sharing plans, up from $7 million in the first quarter of this year.  There was no accrual for profit sharing in 1992.  Profit after tax return on assets for the quarter was 7.4 percent, compared with 5.4 percent in the first quarter of 1993 and 4.1 percent for the full year in 1992.  TI's goal is to achieve a sustained after-tax return on assets of 8-10 percent.
    Royalty revenues for the quarter were $125 million, including $31 million in one-time royalties, reflecting patent-license agreements reached during the quarter with Hyundai Electronics Industries Co., Ltd., Gateway 2000, Inc., and Nippon Steel Semiconductor Corporation. Last year's second quarter included $124 million in royalty revenues, including $45 million in one-time amounts.
    Net revenues for the first six months of 1993 were $3,988 million, up 12 percent from the same period of 1992.  Profit from operations for the first half of 1993 was $312 million, up 63 percent from the first half of 1992.  Net income for the first six months of 1993 was $192 million, compared with $112 million in the same period of 1992.  For the first six months of 1993, earnings per share were $2.04, compared with $1.10 in the first six months of 1992.
    In his letter to stockholders, TI Chairman, President and CEO Jerry R. Junkins said:
    Semiconductors
    "TI's semiconductor business has improved steadily over the past five quarters, despite delayed economic recovery in some of the industry's key geographic regions.  TI's semiconductor orders reached all-time highs in the second quarter.  Orders reached record levels in Japan, Europe and the Asia-Pacific region, with strong demand across all major product lines.  TI's semiconductor revenues grew faster than the total market and reached record levels in the quarter, supported by increased shipments of bipolar products, memory and microprocessors.
    "Semiconductor profitability continues to benefit from our emphasis on differentiated products, cost control and manufacturing efficiencies. More than one-third of our bipolar logic and linear revenues are from differentiated CMOS and BiCMOS products.  Strength in these products, coupled with resurgence in demand for TI's core bipolar logic and linear circuits, contributed to an improvement in semiconductor operating margins over the first quarter of this year.
    "Progress continues in the rampup of advanced joint-venture wafer- fab capacity.  KTI, the joint-venture in Japan with Kobe Steel, reached volume production of super-shrink 4-megabit dynamic random-access memory chips (DRAMs) on 200-millimeter wafers, with logic production expected in the second half of this year.  TECH, the joint-venture in Singapore, with Canon, Hewlett-Packard and the Singapore Economic Development Board, processed its first 200-millimeter wafers during the quarter.  It is scheduled to be in volume production in 1994.
    "We continue to see evidence of the success of our semiconductor strategy of Total Integration(TM), bringing together the technology, tools, information, and service to help our customers be more competitive in their markets.  We are expanding our successful engagements with major customers in the United States, Europe and Japan, and we are developing strong relationships in the rapidly growing Asia- Pacific region.  For example, TI digital signal processors and microcontrollers are winning high-volume designs at major Asia-Pacific manufacturers of consumer, computer, communications, and automotive equipment.  These kinds of relationships are key to improving the stability and financial performance of our semiconductor business.
    Defense Electronics
    "TI's defense electronics business maintained stable margins on lower revenues, while continuing to adapt to a smaller market environment.  During the quarter, we entered new contracts for night- vision systems and upgrades of fire-control systems.  We believe these orders will strengthen TI's competitive position as a preferred supplier of infrared night-vision systems.
    Information Technology
    "In information technology, we are making progress in extending our Information Engineering Facility(TM) (IEF) software to the client/server market.  Successful introduction of new products in the second half of 1993, together with control of discretionary costs, is key to improving the financial performance of this business.
    Outlook
    "The world semiconductor market has continued to grow faster than we expected, particularly in the United States, with little help thus far from the overall economy.  Semiconductor inventories at major U.S. equipment manufacturers are slightly higher than in April, but they remain near record low levels.  The U.S. semiconductor market was exceptionally strong in the first half of 1993, growing at a rate well ahead of our earlier projection of 25 percent for the year.  While we expect some easing in the rate of U.S. market growth, we are beginning to see gradual improvement in Japan, keeping total world market growth at a healthy rate.  Longer term, we believe the growth of the world semiconductor market is likely to be more sustainable than in the past, because of the different timing of economic recovery in major geographic regions, and because of conservative capacity additions relative to industry revenues.
    "To support our customers' needs for submicron CMOS semiconductors, we plan to increase capital spending in 1993 to about $700 million. This is an increase of $50 million from our prior projection.
    "Although revenues in our defense electronics business are expected to continue their gradual decline, we believe the opportunities for growth in semiconductors and information technology will more than offset the effect of lower defense revenues.
    Summary
    "We will continue to keep operations aligned with market demand across TI.  The gains we are seeing in cycle-time reduction are couraging, and we will continue that emphasis.  We believe these programs, coupled with quality improvements and our emphasis on higher value-added products and services, are strengthening our long-term customer relationships, leading to more stability across TI and contributing to improved return on assets and increased shareholder value," Mr. Junkins concluded.
             TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
                   Consolidated Financial Statements
           (In millions of dollars, except per-share amounts)
                                                 For Three Months Ended
                                                  June 30,     June 30,
                                                     1993         1992
    Income
    Net revenues                                  $ 2,105      $ 1,867
    Operating costs and expenses:
     Cost of revenues                               1,557        1,418
     General, administrative and marketing            306          288
     Employees' retirement and profit sharing plans    69           33
      Total                                         1,932        1,739
    Profit from operations                            173          128
    Interest income                                     7            6
    Other income (expense) net                          1          (12)
    Interest on loans                                  12           13
    Income before provision for income taxes          169          109
    Provision for income taxes                         57           37
    Net income                                    $   112      $    72
    Net income, less dividends accrued on
     preferred stock                              $   104      $    63
    Earnings per common and common equivalent
     share (A)                                    $  1.18      $  0.73
    Cash dividends declared per share of common
     stock                                        $  0.18      $  0.18
    (A) Earnings per common and common equivalent share are based on average common and common equivalent shares outstanding (93.8 million shares and 96.0 million shares for the second quarters of 1993 and 1992).  In computing per-share earnings, "net income, less dividends accrued on preferred stock" is increased by $7 million for the second quarters of 1993 and 1992 for dividends and interest, net of tax and profit sharing effect, on the conversion preferred stock and convertible debentures considered dilutive common stock equivalents.
             TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
                   Consolidated Financial Statements
           (In millions of dollars, except per-share amounts)
                                                   For Six Months Ended
                                                   June 30,     June 30,
                                                      1993         1992
    Income
    Net revenues                                    $ 3,988      $ 3,561
    Operating costs and expenses:
     Cost of revenues                                 2,963        2,742
     General, administrative and marketing              590          562
     Employees' retirement and profit sharing plans     123           66
      Total                                           3,676        3,370
    Profit from operations                              312          191
    Interest income                                      15           12
    Other income (expense) net                          (5)          (6)
    Interest on loans                                    24           25
    Income before provision for income taxes and
     cumulative effect of accounting changes            298          172
    Provision for income taxes                          102           60
    Income before cumulative effect of
     accounting changes                                 196          112
    Cumulative effect of accounting changes              (4)          --
    Net income                                      $   192      $   112
    Net income, less dividends accrued on
     preferred stock                                $   177      $    92
    Earnings per common and common equivalent share(A):
     Income before cumulative effect of
      accounting changes                            $  2.09      $  1.10
     Cumulative effect of accounting changes          (0.05)          --
     Net income                                     $  2.04      $  1.10
    Cash dividends declared per share of
     common stock                                   $  0.36      $  0.36
    (A) Earnings per common and common equivalent share are based on average common and common equivalent shares outstanding (93.5 million shares and 85.2 million shares for the six months ended June 30, 1993 and 1992).  The average number of shares used in computing per-share earnings for the six months ended June 30, 1993 assumes the conversion of the company's conversion preferred stock (6.6 million shares) and convertible debentures (2.4 million shares); for the six months ended June 30, 1992 the average number of shares used assumes the conversion of the company's convertible debentures (2.8 million shares).  In computing per-share earnings, "net income, less dividends accrued on preferred stock" is increased by $14 million and $2 million for the six months ended June 30, 1993 and 1992 for dividends and interest, net of tax and profit sharing effect, on the conversion preferred stock and convertible debentures considered dilutive common stock equivalents.
    SELECTED BALANCE SHEET ITEMS
    (Millions of dollars)
                                                June 30,    Dec. 31,
                                                   1993        1992
    Cash and short-term investments            $    834    $    859
    Accounts receivable (net)                     1,044         975
    Inventories (net)                               790         734
    Total current assets                          3,007       2,626
    Property, plant and equipment (net)           2,145       2,133
    Total assets                                  5,718       5,185
    Current liabilities                           1,661       1,665
    Long-term debt, loans and current LTD           919         963
    Stockholders' equity                          2,137       1,947
    Debt-to-total-capital ratio                     .30         .33
    Supplemental Financial Information
    TI's orders for the second quarter of 1993 were $2,051 million, up 10 percent from the second quarter of 1992.  Orders in the components segment were up 28 percent from the second quarter of last year, with particular strength in semiconductors.  Orders in defense electronics were down 28 percent from the second quarter of 1992.  Defense orders in the second quarter of 1992 were high because of orders related to Operation Desert Storm; those orders were not repeated this year. Metallurgical materials orders were up 4 percent, and digital products segment orders were down 2  percent.
    TI's net revenues for the second quarter were $2,105 million, up 13 percent from the second quarter of 1992.  Revenues in the components segment were up 26 percent from last year's second quarter.  Increased shipments of semiconductors more than offset the effect of lower one- time semiconductor royalties.  Revenues in the digital products segment were up 4 percent from the second quarter of 1992.  Excluding the multiuser minicomputer systems and services operation sold to Hewlett- Packard in 1992, second-quarter revenues in the digital products segment were up 25 percent from the second quarter of 1992, primarily because of increased shipments of notebook computers and higher royalties.  Defense electronics revenues were down 8 percent from last year's second quarter, primarily because of reduced quantities of HARM missiles. Metallurgical materials revenues were up 5 percent from the second quarter of 1992.
    Profit from operations for the second quarter of 1993 was $173 million, compared with $128 million in the second quarter of last year. Profit in the components segment was up substantially from the second quarter of last year, with strong improvement in semiconductor margins. Defense electronics margins remained stable on lower revenues.  In digital products, segment profit was essentially unchanged from the second quarter of 1992 because of higher royalty revenues.  However, the loss in the information technology business widened from the first quarter of this year, primarily because of higher costs in custom manufacturing, and the consumer business operated at a loss.
    The income tax rate for the second quarter of 1993 was 34 percent, which, barring an increase in the U.S. statutory rate, is the current estimate of the rate for the full year.
    For the first six months of 1993, TI's orders were $4,298 million,
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Date:Jul 16, 1993
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