Texas Instruments 4Q16 Earnings Call Notes

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Texas Instruments (TXN) Q4 2016 Results

David Pahl – VP and Head of IR

Industrial improvement continued

“Revenue for the fourth quarter increased 7% from a year-ago, as demand for our products remained strong in the automotive market. The improvement we saw in the third quarter in the industrial market continues. Demand in personal electronics market was down slightly from a year-ago. ”

revenue segment overview

“Specifically, in 2016, industrial comprised 33% of our revenue, up 2 points from 2015. Automotive was 18% of our revenue, up 3 points. Personal electronics was 26%, down 4 points. Communications equipment and enterprise systems were 13% and 6% respectively, both year and to last year, while other was about 4%. We did not have a customer that was more than 10% of our revenue in 2016.”

Kevin March – SVP, CFO

We have been intentional about directing investments towards auto and industrial

“Joe, this isn’t — as you know and you have been tracking our revenues inside of that market for some time. It’s not something that is capping this quarter, right. We have been having very strong growth inside of automotive and that is a result of how we allocate capital. We have for some time been directing investments and increases both in automotive and industrial. And that’s because we think that those are the two markets that are going to provide growth, not just for us but in our industry. So — and as you know, these are long tail type of design wins and revenue strength. And we are very intentional as I mentioned earlier trying to direct our investments, so we are not just seeing growth in one sector or at one customer.”

Not a lot has changed in the overall environment

“Yes. So, first Vivek, I’ll just point out that when we look at the overall microenvironment, we really don’t see something that has significantly changed in sometime. So, we continue to believe that we’re operating in a very similar microenvironment that we have, that we haven’t been If you look at inside of the quarter, demand came in stronger, really across most markets in businesses. The only notable exception as I talked about before was personal electronic came in about as we expected. And to your point, we are seeing choppiness in particular markets. Some of that more recently has been driven by one large customer. You can go back to clock not too long ago into last year we saw some choppiness in comps equipment before that we had a PC, XP refresh cycle that came to an end. And none of those were really tighter the overall economy, there was just very specific things going on within specific market. So, that’s really the environment that we thing that we’re operating in now.”

Rafael Lizardi – Co-CFO