Texas Instruments Q4 sales of $3.4bn were 1% down on Q3 and 3% down on Q4 2010, but operating profit of $365m was 55% down on Q3’s 814m and 70% down on the $1.2bn of Q4 2010 as a result of one-off charges.
Cash flow of $970m was 15% down on Q3’s $1.1bn and 21% down on the $1.2bn of Q4 2010.
For Q1 TI expects revenue of $3.02 - $3.28bn. 2012 capex is set at $700m.
"Revenue in the fourth quarter was higher than expected across all our major product lines, reinforcing our belief that we're at the bottom of this downturn,” says Rich Templeton, TI CEO, “ I'm pleased to say that despite the downturn and the lower factory utilization that came with it, cash flow from operations was strong and well above levels as compared with similar points in prior downturns.”
TI took charges of $112m in respect of closing close two manufacturing facilities - in Hiji, Japan, and Houston, Texas - over the course of the next 18 months. The two plants produced about 4% of TI's revenue in 2011, and each employs about 500 people. The closures will save about $100m a year.
"These sites have made strong, high-quality contributions over the 30-plus years each has operated," says Templeton, "they demonstrate the tremendous cash flow potential associated with analogue products, where factory lives are literally measured in decades. However, we're now at the point where each of these sites requires significant upgrades, and it makes financial sense to shift production to larger, more advanced facilities."
TI’s Q4 was affected by the $256m acquisition costs associated with buying National Semiconductor.
Results also include $112 million of restructuring charges associated with the planned facility closings announced today.
In addition to the restructuring and acquisition-related charges, Q4 gross profit was negatively impacted by costs associated with low levels of factory utilisation and charges for wireless baseband inventory – a business area it is exiting.
Q4 orders were $2.86bn, down 9% from Q4 2010 and down 7% from Q3.
Inventory was $1.8bn at the end of the quarter, up $268m from Q4 2010 and down $177m from Q3.
Q4 capital expenditures were $152m compared with $301m in Q4 2010 and $193m in Q3.
For 2011, TI had revenue 2% down on 2010 at $13.7bn for an operating profit 34% down on 2010 at $$3bn and net profit 31% down on 2010 at $2.2bn.
2011 Cash flow was $3.25bn, 15% down on the $3.8bn of 2010.