Revenue Analysis
Total and Operating Revenue: TXN has shown fluctuating total revenue over the periods, with a decline in the most recent quarter (Q1 2024: $3.66B) compared to the previous year (Q1 2023: $4.38B). This suggests some volatility in sales or possibly pricing strategies.
Gross Profit Margins: The gross profit margin has also seen variations. As of Q1 2024, the margin stands at $2.10B on revenues of $3.66B, indicating a gross profit margin of about 57%, which is lower than the 65% in Q1 2023, indicating changes in cost of goods sold or sales mix.
Cost Management
Cost of Revenue: The Cost of Revenue was $1.57B in Q1 2024, which has decreased compared to $1.62B in Q1 2023, showing some improvement in cost management.
Operating Expense: Operating expenses have increased moderately from $0.93B in Q1 2023 to $0.93B in Q1 2024. This might indicate rising costs in R&D or SG&A.
Total Expenses: Total Expenses increased from $2.44B in Q1 2023 to $2.50B in Q1 2024, suggesting overall increased cost pressure.
Profitability Analysis
EBITDA: EBITDA decreased from $2.30B in Q1 2023 to $1.77B in Q1 2024, indicating a decline in operating effectiveness over the period.
Operating Income: The Operating Income showed a decline from $1.93B in Q1 2023 to $1.16B in Q1 2024, further pointing to decreasing operational efficiency.
Pretax Income and Net Income: Pretax Income declined from $1.95B in Q1 2023 to $1.29B in Q1 2024. Similarly, Net Income also fell significantly from $1.71B in Q1 2023 to $1.11B in Q1 2024, reflecting lower profitability across the board.
Cash Flow Indicators
Reconciled Depreciation: Depreciation expenses appear marginally increased, which could be linked to investment in fixed assets. It increased from $281M in Q1 2023 to $362M in Q1 2024.
Interest Expense: Interest Expense was stable at around $116M in Q1 2024, similar to previous quarters, impacting finance costs.
Taxation
Tax Rate: The tax rate has fluctuated, with an increase to 14.5% in Q1 2024 from 12.2% in Q1 2023.
Tax Provision: Tax Provision increased from $238M in Q1 2023 to $188M in Q1 2024, aligning with the changes in pretax income.
Tax Effect of Unusual Items: A notable tax effect of unusual items was observed in Q1 2024 at $18M, unlike the previous year which had none. This may reflect non-recurring tax adjustments or credits.
Shareholder Metrics
Diluted and Basic EPS: Both diluted and basic EPS have shown a decline (Diluted EPS from 1.85 in Q1 2023 to 1.2 in Q1 2024; Basic EPS from 1.87 in Q1 2023 to 1.21 in Q1 2024), reflecting the reduced profitability.
Average Shares: The average shares outstanding remained relatively stable, reflecting stable shareholder equity.
Net Income Available to Common Stockholders: This figure also saw a decrease from $1.71B in Q1 2023 to $1.1B in Q1 2024, which tracks with the net income trends.
Conclusion
Overall, TXN has experienced a decrease in revenue and profitability metrics over the past three years, with rising costs and fluctuating tax rates impacting the bottom line. The firm could benefit from reassessing its cost structure and possibly optimizing its product mix or pricing strategies to bolster profitability. Continued attention to innovation and market positioning could help counteract the adversities faced.