Printer Friendly

TI REPORTS THIRD QUARTER 1992 EARNINGS; SEMICONDUCTOR OPERATIONS RETURN TO PROFITABILITY

 TI REPORTS THIRD QUARTER 1992 EARNINGS;
 SEMICONDUCTOR OPERATIONS RETURN TO PROFITABILITY
 DALLAS, Oct. 16 /PRNewswire/ -- Texas Instruments (TI) (NYSE: TXN) today announced its 1992 third-quarter operating results.
 TI's financial performance continues to make steady progress, highlighted by the return of semiconductor operations to profitability in the third quarter.
 Financial Summary
 Net revenues for the three months ended Sept. 30, 1992, were $1,892 million, compared with $1,699 million in the third quarter of 1991.
 Profit from operations was $116 million. This represents a $177 million turnaround from the third quarter of 1991. Last year's third-quarter results included a special charge of $55 million for cost-reduction actions.
 Net income for the third quarter of 1992 was $57 million, compared with a net loss of $113 million in the third quarter a year ago. The results for this year's quarter include a pretax charge of $10 million related to the sale of TI's multiuser minicomputer systems and services operations.
 Earnings per share were $0.58, compared with a loss per share of $1.45 in the third quarter of 1991.
 Results for the quarter include royalty revenues of $83 million, compared with $50 million in the third quarter of 1991. Third-quarter 1992 royalty revenues include one-time amounts totalling $9 million from patent license agreements reached with several companies during the quarter.
 Semiconductors: Continued Improvement
 In his letter to stockholders, TI's chairman, president and chief executive officer, Jerry R. Junkins, made the following remarks:
 "TI's semiconductor orders reached record levels in this year's third quarter, reflecting improved order rates in the United States and ongoing strength in the Asia-Pacific region. Semiconductor revenues also reached an all-time high in the quarter, reflecting sequential improvement in market demand for application-specific circuits, standard logic and linear products.
 "TI's semiconductor business operated at a profit in the third quarter. Financial performance improved over the second quarter of this year, particularly in application-specific products.
 "We achieved volume shipments of the SuperSPARC(TM) microprocessor during the quarter, marking further progress toward our goal of generating more than half of our semiconductor revenues from differentiated products. We also strengthened our differentiated product line with the announcement of PRISM(TM), a methodology for integrating multiple semiconductor technologies on a single chip while dramatically reducing development time. In addition, we recently announced volume production of the TI486SLC microprocessor family and the introduction of microSPARC(TM), a highly integrated reduced instruction-set computer (RISC) microprocessor that will allow workstation manufacturers to create commercial workstations at a cost comparable with personal computers.
 "We are continuing the conversion of capacity at TI's most advanced semiconductor manufacturing facilities to production of differentiated products. We believe this will improve the stability of our semiconductor business and strengthen our support for major customers.
 Defense Electronics: Stable Performance
 "Our defense electronics business is maintaining stable profitability while continuing to adapt to changes in the defense market. We believe our products and technologies are well matched to the defense needs of the 1990s. During the third quarter, we were selected to develop multifunction broad-band technology for the U.S. Navy's Airborne Shared Aperture Program. We also were a member of the team selected to apply our solid-state microwave technology for the U.S. Army's ground-based radar program. It is our strategy to have a good mix of technology, development and production capabilities to meet our objective of being our customers' preferred defense electronics supplier.
 "We are pleased and very proud that our Defense Systems & Electronics Group has been selected by the U.S. Department of Commerce to receive a 1992 Malcolm Baldrige National Quality Award in the manufacturing category. This is the first business solely dedicated to defense to win the nation's highest quality honor. In a rapidly changing business environment, the people of our defense business have continued the dedication to quality, customer satisfaction and continuous improvement that we believe will be vital to our success in the future.
 Information Technology: Expanding Software Business
 "We are continuing to build a profitable business in information technology, supported by strong growth in computer-aided software engineering (CASE) tools, notebook computers and laser printers.
 "TI's integrated CASE product, Information Engineering Facility(TM) (IEF)(TM), was selected by Electronic ata Systems Corporation (EDS) as a corporate-approved tool for developing and maintaining computer software applications for EDS customers. TI also announced plans to market the Business Development Facility(TM) (BDF)(TM), a new workstation-based software tool for business process engineering that helps customers identify opportunities for dramatic improvements in productivity, cycle time, cost, and quality.
 "On October 2, TI signed a definitive agreement for the sale to Hewlett-Packard Company of TI's commercial UNIX(TM)-based multiuser minicomputer systems and services operations. This sale will allow TI to focus on software and services as well as on hardware where we have a sustainable competitive advantage.
 Outlook
 "The U.S. semiconductor market has shown significant improvement in 1992, paced by strong computer demand. Inventories of semiconductors at major U.S. customers have reached new lows. However, growth in the world semiconductor market continues to be restrained by sluggish world economies, especially by weakness in Japan, and we expect only gradual market improvement in the near term. In TI's defense electronics business, we expect near-term revenues to be more stable on a quarter- to-quarter basis than in the past, when they were biased toward the second half of the year.
 "Despite widespread economic weakness, we've been able to maintain steady progress in improving quality, strengthening our financial performance and building a stronger company. We believe we will emerge from this period of transition in a strong position to achieve our long- term goals, but there is still work ahead of us to achieve the performance of which we are capable and which our stockholders deserve."
 TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
 Consolidated Income Statement
 (In millions of dollars, except per-share amounts.)
 For three months ended Sept. 30: 1992 1991
 Net revenues $ 1,892 $ 1,699
 Operating costs and expenses:
 Cost of revenues 1,441 1,425
 General, administrative and marketing 301 308
 Employees' pension and profit sharing plans 34 27
 Total 1,776 1,760
 Profit (loss) from operations 116 (61)
 Interest income 8 6
 Other income (expense) net (23) (16)
 Interest on loans 13 13
 Income (loss) before provision
 for income taxes 88 (84)
 Provision for income taxes 31 29
 Net income (loss) $ 57 $ (113)
 Net income (loss), less dividends
 accrued on preferred stock $ 48 $ (119)
 Earnings (loss) per common and
 common equivalent share(A) $ 0.58 $(1.45)
 Cash dividends declared per share
 of common stock $ 0.18 $ 0.18
 (A) -- Earnings (loss) per common and common equivalent share are based on average common and common equivalent shares outstanding (85.2 and 82.0 million shares for the third quarters of 1992 and 1991). The average number of shares used in computing per-share earnings for the third quarter of 1992 assumes the conversion of the company's convertible debentures (2.4 million shares) but not the conversion of the company's conversion preferred stock. In computing per-share earnings, "net income (loss), less dividends accrued on preferred stock" is increased by $1 million for the third quarter of 1992 for interest (net of tax) on the convertible debentures considered dilutive common stock equivalents.
 TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
 Consolidated Income Statement
 (In millions of dollars, except per-share amounts.)
 For nine months ended Sept. 30: 1992 1991
 Net revenues $ 5,453 $ 5,032
 Operating costs and expenses:
 Cost of revenues 4,182 4,206
 General, administrative and marketing 864 960
 Employees' pension and profit sharing plans 100 73
 Total 5,146 5,239
 Profit (loss) from operations 307 (207)
 Interest income 20 19
 Other income (expense) net (30) (33)
 Interest on loans 38 27
 Income (loss) before provision for income taxes 259 (248)
 Provision for income taxes 89 76
 Net income (loss) $ 170 $ (324)
 Net income (loss), less dividends
 accrued on preferred stock $ 140 $ (346)
 Earnings (loss) per common and
 common equivalent share(b) $ 1.68 $(4.22)
 Cash dividends declared per share
 of common stock $ 0.54 $ 0.54
 (A) -- Earnings (loss) per common and common equivalent share are based on average common and common equivalent shares outstanding (85.2 and 81.9 million shares for the nine months ended Sept. 30, 1992 and 1991). The average number of shares used in computing per-share earnings for the first nine months of 1992 assumes the conversion of the company's convertible debentures (2.7 million shares) but not the conversion of the company's conversion preferred stock. In computing per-share earnings, "net income (loss), less dividends accrued on preferred stock" is increased by $3 million for the nine months ended Sept. 30, 1992, for interest (net of tax) on the convertible debentures considered dilutive common stock equivalents.
 SELECTED BALANCE SHEET ITEMS
 (Millions of dollars)
 9/30/92 12/31/91
 Cash and short-term investments $ 680 $ 601
 Accounts receivable (net) 1110 905
 Inventories (net) 798 815
 Total current assets 2646 2381
 Property, plant and equipment (net) 2152 2354
 Total assets 5130 5009
 Current liabilities 1594 1568
 Long-term debt, loans and current LTD 953 926
 Stockholders' equity 1994 1955
 Debt-to-total-capital ratio .32 .32
 Supplemental Financial Information
 TI's orders for the third quarter of 1992 were $1,688 million, down 12 percent from the same period of 1991. Orders were up 30 percent in components, primarily because of strength in application-specific products. Defense electronics orders were down 66 percent compared with year-ago levels, primarily reflecting a large replenishment order for HARM missiles in the third quarter of 1991. Orders in metallurgical materials were down 14 percent because of sluggish world economies, and orders were essentially unchanged in digital products.
 Third-quarter 1992 net revenues were $1,892 million, an 11 percent increase from the $1,699 million recorded a year ago. Revenues increased from the third quarter of 1991 in all major segments: 19 percent in components, 6 percent in digital products and 2 percent in defense electronics. Revenues were down 1 percent in metallurgical materials.
 Profit from operations for the third quarter was $116 million, compared with a $61 million operating loss in the third quarter a year ago. The largest single contributor to this positive swing was improved operating performance in components, primarily because of cost reductions and increased shipments. In defense electronics, improved performance on production programs led to an increase in profitability over the third quarter of 1991. The digital segment benefitted from cost reductions and operated at a profit for the quarter, compared with a loss in the third quarter of 1991. TI's results for last year's third quarter included a $55 million pretax charge associated with cost- reduction actions.
 The third-quarter income tax rate was 34.6 percent, the same as the year-to-date tax rate and our current projection for 1992.
 For the first nine months of 1992, net revenues were $5,453 million, up 8 percent from the same period of 1991. The gain was primarily in components, where increased shipments in memory and application-specific products more than offset memory pricing pressures. Included in net revenues for the first nine months of 1992 and 1991 are royalty revenues of $302 million and $200 million, respectively.
 Profit from operations for the first nine months of 1992 was $307 million, compared with a loss from operations of $207 million in the same period of last year. Operating performance improved in all major segments, with the largest improvement in components. The results for the first nine months of 1991 included special, pretax charges of $185 million for cost-reduction actions.
 During the first three quarters of 1992, cash and cash equivalents plus short-term investments increased by $79 million to $680 million as of Sept. 30, 1992. During the first quarter, the company purchased and retired, at an immaterial gain, $100 million of its 2.75 percent convertible subordinated debentures due 2002.
 In April the company issued $150 million of 8.75 percent notes due 2007, the proceeds of which were used in part to reimburse general funds for the purchase of the debentures. In March the company redeemed $71 million of its auction-rate preferred stock. The company will redeem an additional $75 million of its auction-rate preferred stock on December 1. In June the company filed a shelf registration with the Securities and Exchange Commission for $300 million of debt securities, to provide flexibility for possible future debt issuance. Cash provided by operating activities net of additions to property, plant and equipment was positive for the nine months ended Sept. 30, 1992. TI's debt-to-total-capital ratio was .32 at the end of the third quarter, down .01 from the second quarter and unchanged from year-end 1991.
 TI's backlog of unfilled orders as of Sept. 30, 1992, was $3,558 million, down $337 million from the end of last year's third quarter and down $204 million from the end of this year's second quarter. Timing of orders in defense electronics was the primary cause for the changes.
 TI-funded R&D was $112 million in third-quarter 1992, compared with $124 million in the same period a year ago. For the first nine months of this year, TI-funded R&D was $349 million, compared with $387 million in the same period of last year.
 Third-quarter 1992 capital expenditures were $115 million, compared with $104 million in last year's third quarter. For the first nine months of 1992, capital expenditures were $282 million, compared with $388 million in the same period of 1991. Capital expenditures for the year are now expected to be about $450 million.
 Depreciation in the third quarter of 1992 was $154 million, compared with $156 million in last year's third quarter. For the first nine months of 1992, depreciation totalled $454 million, compared with $427 million in the same period of 1991. Depreciation in 1992 is expected to be about $615 million.
 NOTE TO EDITORS: Texas Instruments Incorporated, headquartered in Dallas, is a high-technology company with sales or manufacturing operations in more than 30 countries. TI develops, manufactures and markets semiconductors, defense electronics systems, software productivity tools, computers and peripheral products, custom engineering and manufacturing services, electrical controls, metallurgical materials, and consumer electronic products.
 Trademarks: Business Development Facility, DF, Information Engineering Facility, IEF, microSPARC, PRISM, and SuperSPARC are trademarks of Texas Instruments. SPARC is a trademark of SPARC International, Inc. UNIX is a registered trademark of UNIX System Laboratories.
 -0- 10/16/92
 /CONTACT: Terri West of Texas Instruments, 214-995-3481/
 (TXN) CO: Texas Instruments ST: Texas IN: CPR SU: ERN


TS -- NY011 -- 0807 10/16/92 09:20 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 16, 1992
Words:2414
Previous Article:KELLOGG COMPANY ANNOUNCES THIRD-QUARTER RESULTS
Next Article:UNIVERSAL HOSPITAL SERVICES RENTAL REVENUES AND EARNINGS INCREASE, BUT LESS THAN ANALYST'S EXPECTATIONS
Topics:


Related Articles
TI REPORTS NET INCOME OF $72 MILLION FOR SECOND QUARTER OF 1992; FINANCIAL PERFORMANCE CONTINUES TO STRENGTHEN
TI ANNOUNCES FIRST-QUARTER 1993 RESULTS; PROFIT FROM OPERATIONS DOUBLES OVER YEAR AGO
MICRON TECHNOLOGY INC. REPORTS THIRD-QUARTER 1993 RESULTS
MICRON TECHNOLOGY INC. REPORTS THIRD-QUARTER 1993 RESULTS
TEXAS INSTRUMENTS REPORTS RECORD REVENUES, PROFITS FOR 1993
TI REPORTS RECORD THIRD-QUARTER 1994 RESULTS; REVENUES AND EARNINGS AT ALL-TIME HIGHS
TEXAS INSTRUMENTS ANNOUNCES RECORD QUARTERLY RESULTS COMPANY RAISES SEMICONDUCTOR MARKET FORECAST; PLANS TO RECOMMEND DIVIDEND INCREASE
TEXAS INSTRUMENTS POSTS RECORD REVENUES, PROFITS AND EARNINGS
TI'S 1995 EARNINGS TOP $1B ON 27 PERCENT REVENUE GROWTH; COMPANY ACHIEVES THIRD CONSECUTIVE YEAR OF RECORD FINANCIAL RESULTS
TI Reports Increased Profits in Second Quarter 1997

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters