Texas Instruments Q3 Earnings Review
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Texas Instruments reported earnings on the 24th of October after the market closed. Revenue came in at 4.532bn, decreasing 13.5% on a yearly basis, yet staying relatively flat compared to Q2. On a positive note, the company’s revenue didn’t decrease quarterly, while the industry remains, overall, in a down cycle. Something worth pointing out is that the severity of yearly declines continues to increase. Yearly growth rates for the Q4 22, Q1 23, Q2 23 and Q3 23 were -3.35%, -10.7%, -13.07% and -13.53% respectively.
During the third quarter of 2023, TI did 2.81bn in gross profit, down from 3.61bn last year. The respective margin compressed by 690bps leading to a GPM of 62.1%. Operating income was 1.892bn for the quarter and its implied margin was 41.75%, which declined 935bps on a yearly basis. Finally, the company generated 1.7bn in net income, meaning it operated at a 37.7% net profit margin, down from the 43.8% achieved in Q3 of 2022.
It’s relevant to notice that margins also declined on a quarterly basis. The GPM, OPM and NPM decreased 210bps, 177bps and 30bps QoQ.
Two important details on gross margins:
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