This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Texas Instruments CFO: Our Cash Strategy's Paying Off

Stocks in this article: TXN QCOM STM

NEW YORK ( TheStreet) -- Texas Instruments (TXN) may be wrestling with some major macroeconomic issues, as evidenced by its weak outlook this week, but CFO Kevin March says that the company's cash generation efforts are reaping dividends.

Revenue from the company's core analog and embedded processing businesses grew 2% year-over-year during its third-quarter results on Monday, and March said these areas now account for 70% of the company's revenue.

"That's resulting in massive cash generation," he said in an interview with TheStreet, noting that the company's operating cash flow was $1.2 billion during the quarter. "That's about $60 million higher than the prior year and about $526 million higher than the prior quarter," he added.

The chip maker has made a concerted effort to focus on analog and embedded processing, a strategy it says is delivering results for investors, even in a weak market.

March noted that the Dallas-based firm increased its quarterly dividend from 17 cents a share to 21 cents a share during the quarter and also increased its share buyback by a factor of two compared to prior quarters.

Texas Instruments' analog chips are sold into a broad range of products such as laptops, netbooks, servers and video surveillance equipment, while its embedded processing technologies can be found in DVD players, X-ray systems and MRIs.

A lot of post-earnings attention, however, was focused on the company's weak fourth-quarter guidance, the result of ongoing weakness in the semiconductor market and the broader economy.

Canaccord Genuity analyst Bobby Burleson, for example, lowered his Texas Instruments price target on Tuesday and maintained his 'hold' rating, citing headwinds on both revenue and margins. Sterne Agee analyst Vijay Rakesh reduced his estimates for the firm, noting the company's weak fourth quarter outlook.

For the fourth quarter, the Dallas-based company anticipates revenue between $2.83 billion and $3.07 billion, well below the consensus estimate of $3.23 billion.

"Customers are carrying very, very low inventories," said March. "This is largely because of their uncertainty about what demand looks like."

The finance chief said that a number of events are contributing to the atmosphere of economic uncertainty, from the U.S. election to the government change in China and debt issues in Europe. "These three regions are the largest economic regions on the planet and they are all in a period of uncertainty right now," he said.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs