94
Source: Zhineng Automobile
Texas Instruments announced its financial performance for the second quarter of 2024, with revenue of $3.822 billion, a year-on-year decrease of 16% but a month on month increase of 4%.
Overall revenue has declined, but the performance of various end markets is uneven. Among them, the industrial and automotive markets continued to decline month on month, while other end markets achieved growth. The net profit was 1.127 billion US dollars, a year-on-year decrease of 35%.
Part 1
TI's Division Performance Analysis
TI's business is mainly divided into three parts: simulation, embedded processing, and others.
Q2 2024:
The revenue of the simulation department was $2.928 billion, a year-on-year decrease of 11%, and the operating profit was $1.047 billion, a year-on-year decrease of 28%.
The revenue of the embedded processing department was $615 million, a year-on-year decrease of 31%, and the operating profit was $80 million, a year-on-year decrease of 75%.
The revenue of other departments was $279 million, a year-on-year decrease of 22%, and the operating profit was $121 million, a year-on-year decrease of 37%.
TI's revenue forecast for the third quarter of 2024 is expected to be between $3.94 billion and $4.26 billion, with earnings per share expected to be between $1.24 and $1.48. TI expects its effective tax rate to remain around 13%. This expectation indicates that despite the challenging current market environment, TI remains optimistic about its future business development.
Part 2
TI's Cash Flow and Investment Analysis
In the past 12 months, TI's cash flow generated from operating activities was 6.449 billion US dollars, a year-on-year decrease of 12%. This data fully reflects the robustness of TI's business model and the quality of its product portfolio.
It is worth noting that the advantages of 300mm production have also been demonstrated during this period. Free cash flow was $149 million, a year-on-year decrease of 53%. Free cash flow is calculated by subtracting capital expenditures from operating cash flow, mainly reflecting a company's liquidity, cash generation capacity, and shareholder return potential.
TI has invested $3.7 billion in research and development, sales, general and administrative expenses over the past 12 months, while also making $5 billion in capital expenditures and returning $4.9 billion to shareholders. This series of investments demonstrates TI's sustained investment in technology research and market expansion, as well as its high emphasis on shareholder returns.
As of June 30, 2024, TI's total assets were $35.048 billion, total liabilities were $17.834 billion, and shareholder equity was $17.214 billion. Current assets include $2.74 billion in cash and cash equivalents and $6.948 billion in short-term investments. Current liabilities mainly include the current portion of long-term debt of $1.049 billion and accounts payable of $858 million. Overall, TI's financial situation remains robust.
In terms of cash flow, the cash flow generated from operating activities in the second quarter of 2024 was $1.571 billion, the cash flow generated from investing activities was zero, and the cash flow generated from financing activities was $-1.314 billion. Overall, TI generates a large amount of cash in its operating activities, but also has significant expenses in investment and financing activities.
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