Texas Instruments Inc. (NASDAQ:TXN) Q3 2020 Earnings Conference Call - Final Transcript
Oct 20, 2020 • 04:30 pm ET
Good day and welcome to the Texas Instruments 3Q '20 Earnings Release Conference Call. Today's conference is not being recorded.
At this time, I would like to turn the conference over to Dave Pahl. Please go ahead, sir.
Good afternoon and thank you for joining our third quarter 2020 earnings conference call. For any of you missed the release, you can find it on our website at ti.com/ir. This call is being broadcast live over the web and can be accessed through our website. A replay will be available through the web. This call will include forward-looking statements that involve risks and uncertainties that could cause TI's results to differ materially from management's current expectations. We encourage you to review the notice regarding forward-looking statements contained in the earnings release published today as well as TI's most recent SEC filings for a more complete description.
Our Chief Financial Officer, Rafael Lizardi is with me today, and we'll provide the following updates. First, I'll start with a quick overview of the quarter. Next, I'll provide insight into the third quarter revenue results with more details and usual by end market, including some sequential performance since it's more informative at this time. And then lastly, Rafael will cover the financial results, capital management and our guidance for the fourth quarter of 2020.
Let me start with a quick overview with three key points. Revenue was higher than expected and grew 18% sequentially with notable strength from the rebound of automotive and growing demand from personal electronics. Revenue increased 1% from the same quarter a year ago. In April and again in July, we explained we would maintain high optionality with our operating plan so we could support customers, particularly during a time when their ability to forecast will be limited. This approach has served us and our customers well and will continue this posture in the fourth quarter.
Finally, while visibility for the near-term demand has improved, we remain cautious as the broader economic impact of the global pandemic could continue for several years. Our approach in an environment like this is to maintain high optionality with our operating plan in the short-term to continue critical investments in R&D and in new capabilities like those for ti.com and, finally, to invest to ensure long-term manufacturing capacity, particularly for the 2022 to 2025 timeframe. We've made these decisions with our overall ambitions in mind, which include running the company with the mindset of a long-term owner. These decisions have continued to serve us well.
Looking at our segments, Analog grew 18% and Embedded Processing grew 19% sequentially. On a year-over-year basis, Analog grew 7% and Embedded Processing declined 10%. Our other segment declined 19% from a year ago, primarily due to lower calculator sales, where COVID-19 impacted back-to-school sales.
Moving on, I'll now provide some insight into our third quarter revenue by end market. First, the automotive market rebounded with about 75% sequential growth and returned to levels similar to a year ago. Revenue