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NXP Semiconductors NV (NXPI - Free Report) reported second-quarter 2016 adjusted earnings per share (excluding all one-time items but including stock-based compensation) of $1.16 per share, which came ahead of the Zacks Consensus Estimate of $1.11 per share. However, adjusted earnings decreased from $1.29 per share reported in the year-ago quarter.
Quarter Details
NXP Semiconductors’ revenues grew 57% year over year to $2.365 billion and surpassed the Zacks Consensus Estimate of $2.350 billion.
Revenues were boosted by 57.8% increase in Product revenues and 26.3% increase in Corporate & Other revenues on a year-over-year basis. Also, increase in High Performance Mixed Signal (HPMS) segment revenues (up 76% on a year-over-year basis) positively impacted the quarter’s results.
NXP Semiconductors’ adjusted gross margin (excluding all one-time items but including stock-based compensation) expanded 97 basis points (bps) on a year-over-year basis to 49.5%, primarily due to a higher revenue base.
The company’s adjusted operating margin (excluding all one-time items but including stock-based compensation) decreased 313 bps from the year-ago quarter to 22.2%, primarily due to higher adjusted operating expenses as a percentage of revenues. Adjusted operating expenses, as a percentage of revenues, increased 333 bps on a year-over-year basis.
The company’s adjusted net income (excluding all one-time items but including stock-based compensation) came in at $406 million compared with $315 million reported in the year-ago quarter. On a GAAP basis, net loss was $13 million as against net income of $300 million reported in the year-ago period.
NXP Semiconductors exited the quarter with cash and cash equivalents of approximately $1.33 billion compared with $1.49 billion reported in the previous quarter. Receivables were $1.08 billion at the end of the quarter compared with $1.05 billion reported in the previous quarter. NXP Semiconductors’ balance sheet has long-term debt of $8.27 billion, flat quarter over quarter.
The company reported cash flow from operations of $434 million during the quarter. Free cash flow was $363 million. During the quarter, NXP Semiconductors repurchased approximately 4.33 million shares for $365 million.
Guidance
For the third quarter of fiscal 2016, NXP Semiconductors expects revenues in the range of $2.415 billion to $2.515 billion (mid-point $2.465 billion). The Zacks Consensus Estimate is pegged at $2.482 billion. Non-GAAP gross margin is expected to be in a range of 49.7% to 50.7%. Non-GAAP operating margin is expected to be in a range of 27% to 28%.
NXP Semiconductors, a global semiconductor company, is known for its automotive and chip identification business and has seen massive growth in the portable device segment over the past year.
The company reported better-than-expected second quarter 2016 results. Also, year-over-year revenue comparisons were favorable. Moreover, the company provided an encouraging third quarter revenue guidance.
Continued strong adoption of tablets and smartphones, automotive electronics and the emergence of the new category of wearables boosted the demand for processing and sensing devices that run them.
With the acquisition of Freescale Semiconductor, NXP Semiconductors has now become the world’s leading provider of automotive semiconductor solutions and general purpose microcontroller products.
Nonetheless, macroeconomic weakness, competition from Xilinx Inc. and Lattice Semiconductor Corp. (LSCC - Free Report) , consolidation in the telecom market, declining margins and volatility in the semiconductor market remain headwinds.
Currently, NXP Semiconductors has a Zacks Rank #3 (Hold). A better-ranked stock in the technology sector is Box, Inc. (BOX - Free Report) , sporting a Zacks Rank #1 (Strong Buy).
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NXP Semiconductors (NXPI) Q2 Earnings & Revenues Beat
NXP Semiconductors NV (NXPI - Free Report) reported second-quarter 2016 adjusted earnings per share (excluding all one-time items but including stock-based compensation) of $1.16 per share, which came ahead of the Zacks Consensus Estimate of $1.11 per share. However, adjusted earnings decreased from $1.29 per share reported in the year-ago quarter.
Quarter Details
NXP Semiconductors’ revenues grew 57% year over year to $2.365 billion and surpassed the Zacks Consensus Estimate of $2.350 billion.
Revenues were boosted by 57.8% increase in Product revenues and 26.3% increase in Corporate & Other revenues on a year-over-year basis. Also, increase in High Performance Mixed Signal (HPMS) segment revenues (up 76% on a year-over-year basis) positively impacted the quarter’s results.
NXP Semiconductors’ adjusted gross margin (excluding all one-time items but including stock-based compensation) expanded 97 basis points (bps) on a year-over-year basis to 49.5%, primarily due to a higher revenue base.
The company’s adjusted operating margin (excluding all one-time items but including stock-based compensation) decreased 313 bps from the year-ago quarter to 22.2%, primarily due to higher adjusted operating expenses as a percentage of revenues. Adjusted operating expenses, as a percentage of revenues, increased 333 bps on a year-over-year basis.
The company’s adjusted net income (excluding all one-time items but including stock-based compensation) came in at $406 million compared with $315 million reported in the year-ago quarter. On a GAAP basis, net loss was $13 million as against net income of $300 million reported in the year-ago period.
NXP Semiconductors exited the quarter with cash and cash equivalents of approximately $1.33 billion compared with $1.49 billion reported in the previous quarter. Receivables were $1.08 billion at the end of the quarter compared with $1.05 billion reported in the previous quarter. NXP Semiconductors’ balance sheet has long-term debt of $8.27 billion, flat quarter over quarter.
The company reported cash flow from operations of $434 million during the quarter. Free cash flow was $363 million. During the quarter, NXP Semiconductors repurchased approximately 4.33 million shares for $365 million.
Guidance
For the third quarter of fiscal 2016, NXP Semiconductors expects revenues in the range of $2.415 billion to $2.515 billion (mid-point $2.465 billion). The Zacks Consensus Estimate is pegged at $2.482 billion. Non-GAAP gross margin is expected to be in a range of 49.7% to 50.7%. Non-GAAP operating margin is expected to be in a range of 27% to 28%.
NXP SEMICONDUCT Price, Consensus and EPS Surprise
NXP SEMICONDUCT Price, Consensus and EPS Surprise | NXP SEMICONDUCT Quote
Our Take
NXP Semiconductors, a global semiconductor company, is known for its automotive and chip identification business and has seen massive growth in the portable device segment over the past year.
The company reported better-than-expected second quarter 2016 results. Also, year-over-year revenue comparisons were favorable. Moreover, the company provided an encouraging third quarter revenue guidance.
Continued strong adoption of tablets and smartphones, automotive electronics and the emergence of the new category of wearables boosted the demand for processing and sensing devices that run them.
With the acquisition of Freescale Semiconductor, NXP Semiconductors has now become the world’s leading provider of automotive semiconductor solutions and general purpose microcontroller products.
Nonetheless, macroeconomic weakness, competition from Xilinx Inc. and Lattice Semiconductor Corp. (LSCC - Free Report) , consolidation in the telecom market, declining margins and volatility in the semiconductor market remain headwinds.
Currently, NXP Semiconductors has a Zacks Rank #3 (Hold). A better-ranked stock in the technology sector is Box, Inc. (BOX - Free Report) , sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>