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NXP Semiconductors (NXPI) Earnings Decline Y-o-Y in Q3
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NXP Semiconductors NV (NXPI - Free Report) reported third-quarter 2016 earnings per share of 26 cents, which decreased from $1.49 per share reported in the year-ago quarter.
Quarter Details
NXP Semiconductors’ revenues grew 62.2% year over year to $2.469 billion and marginally surpassed the Zacks Consensus Estimate of $2.465 billion.
Revenues were boosted by 62.5% increase in Product revenues and 51.5% increase in Corporate & Other revenues on a year-over-year basis. Also, increase in High Performance Mixed Signal (HPMS) segment revenues (up 80.3% on a year-over-year basis) positively impacted the quarter’s results.
NXP Semiconductors’ reported gross margin contracted 67 basis points (bps) on a year-over-year basis to 47.9%, primarily due to higher cost of sale. Non-GAAP gross profit margins during the quarter came in at 50.5% compared with 49.1% reported in the year-ago quarter.
The company’s operating margin decreased to 7.1% from 24.6% reported in the year-ago quarter. On a Non-GAAP basis operating margins came in at 27.9% compared with 29.5% reported in the year-ago period. The year-over-year decline was primarily due to higher operating expenses as a percentage of revenues. Operating expenses, as a percentage of revenues, increased to 40.9% from 24.2% reported in the year-ago quarter.
The company’s reported net income attributable to shareholders came in at $91 million compared with $361 million reported in the year-ago quarter.
NXP Semiconductors exited the quarter with cash and cash equivalents of approximately $1.57 billion compared with $1.33 billion reported in the previous quarter. Receivables were $1.16 billion at the end of the quarter compared with $1.08 billion reported in the previous quarter. NXP Semiconductors’ balance sheet has long-term debt of $8.76 billion compared with $8.27 billion reported in the previous quarter.
The company reported cash flow from operations of $718 million during the quarter. Free cash flow was $620 million. During the quarter, NXP Semiconductors repurchased approximately 6.5 million shares for $555 million.
Guidance
For the fourth quarter of fiscal 2016, NXP Semiconductors expects revenues in the range of $2.390 billion to $2.490 billion (mid-point $2.44 billion). The Zacks Consensus Estimate is pegged at $2.412 billion. Non-GAAP gross margin is expected to be in a range of 50.4% to 51%. Non-GAAP operating margin is expected to be in a range of 28% to 28.6%.
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’s year-over-year top line comparisons were favorable but the bottom line declined on a year-over-year basis. However, the company provided an encouraging fourth 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.
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NXP Semiconductors (NXPI) Earnings Decline Y-o-Y in Q3
NXP Semiconductors NV (NXPI - Free Report) reported third-quarter 2016 earnings per share of 26 cents, which decreased from $1.49 per share reported in the year-ago quarter.
Quarter Details
NXP Semiconductors’ revenues grew 62.2% year over year to $2.469 billion and marginally surpassed the Zacks Consensus Estimate of $2.465 billion.
Revenues were boosted by 62.5% increase in Product revenues and 51.5% increase in Corporate & Other revenues on a year-over-year basis. Also, increase in High Performance Mixed Signal (HPMS) segment revenues (up 80.3% on a year-over-year basis) positively impacted the quarter’s results.
NXP Semiconductors’ reported gross margin contracted 67 basis points (bps) on a year-over-year basis to 47.9%, primarily due to higher cost of sale. Non-GAAP gross profit margins during the quarter came in at 50.5% compared with 49.1% reported in the year-ago quarter.
The company’s operating margin decreased to 7.1% from 24.6% reported in the year-ago quarter. On a Non-GAAP basis operating margins came in at 27.9% compared with 29.5% reported in the year-ago period. The year-over-year decline was primarily due to higher operating expenses as a percentage of revenues. Operating expenses, as a percentage of revenues, increased to 40.9% from 24.2% reported in the year-ago quarter.
The company’s reported net income attributable to shareholders came in at $91 million compared with $361 million reported in the year-ago quarter.
NXP Semiconductors exited the quarter with cash and cash equivalents of approximately $1.57 billion compared with $1.33 billion reported in the previous quarter. Receivables were $1.16 billion at the end of the quarter compared with $1.08 billion reported in the previous quarter. NXP Semiconductors’ balance sheet has long-term debt of $8.76 billion compared with $8.27 billion reported in the previous quarter.
The company reported cash flow from operations of $718 million during the quarter. Free cash flow was $620 million. During the quarter, NXP Semiconductors repurchased approximately 6.5 million shares for $555 million.
Guidance
For the fourth quarter of fiscal 2016, NXP Semiconductors expects revenues in the range of $2.390 billion to $2.490 billion (mid-point $2.44 billion). The Zacks Consensus Estimate is pegged at $2.412 billion. Non-GAAP gross margin is expected to be in a range of 50.4% to 51%. Non-GAAP operating margin is expected to be in a range of 28% to 28.6%.
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’s year-over-year top line comparisons were favorable but the bottom line declined on a year-over-year basis. However, the company provided an encouraging fourth 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). You can see the complete list of today’s Zacks #1 Rank stocks here
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