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NXP (NXPI) Gears Up for Q1 Earnings: What's in the Cards?

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NXP Semiconductors (NXPI - Free Report) is slated to report first-quarter 2021 results on Apr 26. In the last reported quarter, it delivered an earnings surprise of 27%.

For the to-be-reported quarter, the Zacks Consensus Estimate for earnings is pegged at $2.21 per share. This indicates growth of 8.3% from the year-ago reported figure.

The consensus mark for revenues is pegged at $2.56 billion, implying growth of 26.5% from the year-ago reported figure.

Let’s see how things have shaped up prior to the earnings announcement.

NXP Semiconductors N.V. Price and EPS Surprise

NXP Semiconductors N.V. Price and EPS Surprise

NXP Semiconductors N.V. price-eps-surprise | NXP Semiconductors N.V. Quote

Factors to Consider

NXP's diversified product portfolio is expected to have been a key growth catalyst. Its leading market position and focus on communications infrastructure, automotive and industrial as well as IoT markets may have positively impacted top-line numbers.

The company is expected to have witnessed an improved business environment due to strength in end-markets served, particularly Automotive and Mobile. Additionally, it is expected to have seen improved demand in both direct and distribution channels.

Therefore, revenues and gross margin are expected to have expanded in the to-be-reported quarter.

During the quarter, it made continuous efforts to develop an improved 5nm design strategy, with an aim of increasing software performance required in future cars.

Growing adoption of NXP’s offerings is expected to have strengthened the company’s presence in the automotive market. Moreover, the ongoing digital transformation across the auto vertical is expected to have been a major catalyst in the quarter.

For the quarter to be reported, the company anticipates revenues of $2.55 billion, indicating a 2% sequential and 26% year-over-year increase, citing strength in end-markets served, particularly automotive and mobile.

On a non-GAAP basis, it expects gross margin of 53.5% and non-GAAP operating margin to be 30.4%.

However, the global coronavirus-driven economic crisis has been raising volatility in the semiconductor market. This is likely to pose a challenge to the upcoming quarterly results.

What Our Model Says

Our proven model predicts an earnings beat for the company this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Currently, NXP has a Zacks Rank #3 and an Earnings ESP of +2.26%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks That Warrant a Look

Here are a couple of other stocks that you may also want to consider, as our model shows that too these have the right combination of elements to post an earnings beat in the quarter to be reported.

Waters Corporation (WAT - Free Report) has an Earnings ESP of +2.94% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Verizon Communications Inc. (VZ - Free Report) has an Earnings ESP of +0.41% and a Zacks Rank #3.

KeyCorp (KEY - Free Report) has an Earnings ESP of +0.03% and a Zacks Rank #3.

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