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NXP Semiconductors (NXPI) Q1 Earnings Beat, Revenues Rise Y/Y

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NXP Semiconductors N.V. (NXPI - Free Report) reported first-quarter 2021 non-GAAP earnings of $2.31 per share, which outpaced the Zacks Consensus Estimate by 4.5%. Further, the figure increased 13.2% year over year but declined 13.8% sequentially.

Revenues of $2.57 billion surpassed the Zacks Consensus Estimate of $2.56 billion. The figure was up 27% from the year-ago period and 2% on a sequential basis.

Top-line growth was driven by strong performance across all end-markets in the reported quarter.

End-Markets in Detail

Automotive generated $1.23 billion in revenues (contributing 48% to the total revenues), which reflects a year-over-year increase of 24%.

Revenues from Industrial & IoT were $571 million (22% of total revenues), which rose 52% from the prior-year quarter.

Revenues from Mobile were $346 million (14% of total revenues), up 40% from the year-ago level.

Communication Infrastructure & Others generated $421 million in revenues (which contributed 16% to the total revenues), up 4% year over year.

NXP Semiconductors N.V. Price, Consensus and EPS Surprise

 

NXP Semiconductors N.V. Price, Consensus and EPS Surprise

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

Operating Results

Non-GAAP gross margin was 54.2%, which expanded 240 basis points (bps) from the year-ago quarter. A favorable product mix contributed well.

Operating expenses were $863 million, down 16.9% year over year. As a percentage of revenues, the figure significantly contracted to 33.6% from 51.4% in the prior-year quarter.

Non-GAAP operating margin of 30.9% for the reported quarter expanded 610 bps from the prior-year period.

Balance Sheet & Cash Flow

As of Apr 4, 2021, cash and cash equivalent balance were $1.8 billion compared with $2.3 billion as of Dec 31, 2021.

Inventories were $1.1 billion at the end of the first quarter, up from $1 billion at the end ofthe fourth quarter. Accounts receivables increased to $833 million from $765 million in the previous quarter.

Long-term debt was $7.611 billion at the end of the quarter under review compared to $7.609 billion at the end of the last reported quarter.

Further, the company generated cash flow of $732 million in the first quarter, down from $1.03 billion in the fourth quarter.

Furthermore, it generated a free cash flow of $582 million compared with $926 million in the prior quarter.

In the first quarter, NXP returned $1 billion to shareholders primarily through previously announced dividend payments.

2Q21 Guidance

For second-quarter 2021, NXP expects revenues of $2.50-$2.64 billion. The Zacks Consensus Estimate is pegged at $2.55 billion, which is lower than the mid-point of NXP Semiconductors’ range.

Further, the company expects non-GAAP gross margin between 55.2% and 55.8%. Furthermore, non-GAAP operating margin is anticipated between 30.7% and 31.9%.

Zacks Rank & Stocks to Consider

Currently, NXP Semiconductors carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are KLA Corporation (KLAC - Free Report) , AMETEK, Inc. (AME - Free Report) and Vishay Intertechnology, Inc. (VSH - Free Report) . All three companies currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term earnings growth rates of KLA, AMETEK and Vishay are pegged at 14.03%, 8.78% and 20.26%, respectively.

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