NXP shares climb on better-than-expected first-quarter earnings

Shares of NXP Semiconductor NV closed 1.8% increased in the present day after the Dutch chipmaker posted first-quarter outcomes that topped the consensus estimate by a small margin.

NXP, a former Philips NV unit that spun out in 2006, is finest often called a supplier of car processors. It additionally provides chips for quite a lot of different gadgets together with industrial robots and handsets. NXP manufactures its chips at greater than a half-dozen in-house fabs.

The corporate closed the primary quarter ended March 31 with $3.13 billion in income, which represents a rise of solely 0.2% from the identical time a 12 months earlier. Nonetheless, NXP managed to barely high the consensus analyst estimate of $3.127 billion.

One issue behind the flat quarterly progress was a 1% gross sales decline within the chipmaker’s flagship auto unit, which accounts for over half its income. The unit’s chips are utilized by carmakers to energy quite a lot of car parts together with infotainment shows and security programs. NXP additionally makes processors for extra specialised duties, akin to powering electrical scooter motors.

The corporate’s Comm, Infra and Different income section additionally skilled a requirement drop within the fourth quarter. Gross sales declined 25% year-over-year, to $399 million. The section consists of the income generated by NXP’s networking chip lineups, that are utilized in information middle switches and routers in addition to provider infrastructure.

The decline in NXP’s infrastructure and auto items was totally offset by progress throughout its different core companies. Its cellular chip enterprise noticed gross sales leap 35% year-over-year, to $349 million. Demand for industrial and IoT chips rose 14% in the identical timeframe to achieve $574 million.

The corporate’s cellular chip portfolio consists of smartphone sensors akin to accelerometers. It additionally sells circuits that handset makers can use to energy a tool’s Wi-Fi module, show and different subcomponents.

NXP’s industrial and IoT enterprise, the opposite main contributor to its better-than-expected quarterly outcomes, sells a broader vary of merchandise. Chips made by the unit could be present in manufacturing unit robots’ motors. It additionally provides semiconductors for different programs together with buildings’ air-con and lightning programs in addition to utility meters.

Within the first quarter, NXP inked a cope with Honeywell Worldwide Corp. to produce chips for a line of constructing management programs offered by the latter firm. The chipmaker additionally made investments in its core auto enterprise. And it debuted a brand new car compute module, the S32 CoreRide, that mixes a processor with energy administration circuits and networking gear for connecting to a automotive’s different subsystems.

“Our first-quarter outcomes, steering for the second quarter, and our early views into the second half of the 12 months underpin a cautious optimism that NXP is efficiently navigating via this industry-wide cyclical downturn,” mentioned Chief Government Kurt Sievers. “We proceed to handle what’s in our management enabling NXP to drive stable profitability and earnings in a difficult demand surroundings.””

The corporate’s adjusted web revenue within the first quarter climbed from $396 million a 12 months earlier to $438 million. That translated into adjusted earnings of $3.24 per share, about 2% increased than the $3.16 consensus estimate. NXP expects to finish the present quarter with adjusted earnings of $3 to $3.41 per share on $3.02 billion to $3.2 billion in income, in keeping with what the market anticipated.

Picture: NXP