TI(US:TXN) Huachuang Securities·2024-10-29 15:10Investment Rating - The report assigns a neutral investment rating for Texas Instruments (TXN) based on its performance and market conditions [3][48]. Core Insights - Texas Instruments reported Q3 FY24 revenue of $4.151 billion, a year-over-year decrease of 8% but a quarter-over-quarter increase of 8.6%, slightly above the guidance midpoint [3][6]. - The gross margin for Q3 FY24 was 59.6%, down 2.51 percentage points year-over-year but up 1.75 percentage points quarter-over-quarter, attributed to revenue growth and production optimization [3][8]. - The net profit for Q3 FY24 was $1.362 billion, reflecting a quarter-over-quarter increase of 20.85% but a year-over-year decrease of 20.30% [3][11]. - Inventory at the end of Q3 FY24 was $4.3 billion, with an increase of $190 million from the previous quarter, and inventory days increased to 231 days [3][13]. - Capital expenditures for Q3 FY24 were $1.3 billion, with total capital expenditures over the past 12 months amounting to $4.8 billion [3][14]. - Free cash flow for the past 12 months was $1.5 billion, including $220 million from investment tax credits due to the CHIPS Act [3][21]. Revenue Breakdown - The revenue from the Analog segment in Q3 FY24 was $3.223 billion, accounting for 77.6% of total revenue, with a quarter-over-quarter increase of 10.08% and a year-over-year decrease of 3.88% [3][15]. - The Embedded Processing segment generated $653 million in revenue, representing 15.7% of total revenue, with a quarter-over-quarter increase of 6.18% and a year-over-year decrease of 26.63% [3][15]. - Other businesses contributed $275 million, down 4.84% year-over-year and 1.43% quarter-over-quarter, making up 6.6% of total revenue [3][15]. End Market Performance - The industrial market showed a low single-digit decline, primarily due to customers continuing to digest inventory, while the automotive market exhibited high single-digit growth driven by the Chinese market [3][17]. - The personal electronics market grew approximately 30%, the communication equipment market increased about 25%, and the enterprise systems market grew around 20% [3][17]. - The automotive market in China has shown strong performance, with growth rates reaching 20% for two consecutive quarters, driven by the demand for electric and hybrid vehicles [3][27]. Company Guidance - For Q4 FY24, Texas Instruments provided revenue guidance in the range of $3.7 billion to $4.0 billion, with an expected EPS between $1.07 and $1.29 [3][18].