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NXP Semiconductors (NXPI) Q3 Earnings Beat, Revenues Fall Y/Y
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NXP Semiconductors N.V. (NXPI - Free Report) delivered third-quarter 2023 non-GAAP earnings of $3.70 per share, which outpaced the Zacks Consensus Estimate by 3.35%. The figure decreased 2.9% year over year.
Revenues of $3.43 billion surpassed the Zacks Consensus Estimate of $3.39 billion. The figure was down 0.3% from the year-ago level.
This was attributed to sluggishness in the Industrial & IoT and Mobile end markets during the reported quarter.
The company witnessed strong momentum in the Automotive and Communication Infrastructure & Others markets.
NXPI has returned 14.9% in the year-to-date period, outperforming the industry’s growth of 8.1%.
NXP Semiconductors N.V. Price, Consensus and EPS Surprise
Automotive generated $1.89 billion in revenues (55% of total revenues), reflecting a year-over-year increase of 5%, driven by innovation in system solutions. The figure surpassed the Zacks Consensus Estimate of $1.88 billion.
Revenues from Industrial & IoT were $607 million (17.7% of total revenues), down 15% from the prior-year quarter’s level. The reported figure came ahead of the consensus mark of $589.5 million.
Revenues from Mobile were $377 million (11% of total revenues), down 8% from the year-ago period’s level. The figure beat the Zacks Consensus Estimate of $349 million.
Communication Infrastructure & Others generated $559 million in revenues (16.3% of total revenues), up 8% year over year. The new cellular standards contributed well to segmental growth. The reported figure missed the consensus mark of $565.06 million.
Operating Results
The non-GAAP gross margin was 58.5%, which expanded 50 basis points (bps) from the year-ago quarter’s level.
Research and development (R&D) expenses were $601 million, up 9.7% year over year. Selling, general and administrative (SG&A) expenses increased 1.7% year over year to $294 million.
As a percentage of revenues, R&D expenses expanded 160 bps year over year to 17.5% and SG&A expenses increased 20 bps year over year to 8.6%.
The non-GAAP operating margin of 35% for the reported quarter contracted 190 bps from the prior-year period’s figure.
Balance Sheet & Cash Flow
As of Oct 1, 2023, the cash and cash equivalent balance was $4.04 billion, up from $3.86 million as of Jul 2, 2023.
Long-term debt was $10.173 billion at the end of the quarter under review compared with $10.171 billion at the end of the last reported quarter.
NXPI generated a cash flow of $988 million in the third quarter of 2023, up from $756 million in the previous quarter.
The company’s capex investment was $200 million in the reported quarter. NXPI generated a free cash flow of $788 million in the quarter.
During the third quarter, it made dividend payments of $262 million and repurchased shares worth $306 million.
Guidance
For fourth-quarter 2023, NXP Semiconductors expects revenues of $3.3-$3.5 billion, suggesting a decline of 1% year over year at the midpoint. The Zacks Consensus Estimate for revenues is pegged at $3.41 billion.
It expects a non-GAAP gross margin between 58% and 59%. The non-GAAP operating margin is anticipated to be between 34.5% and 36.3%.
The company anticipates non-GAAP earnings within the range of $3.44-$3.86 per share. The consensus estimates for the same is pegged at $3.59 per share.
Zacks Rank & Stocks to Consider
NXP Semiconductors currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader technology sector are Asure Software (ASUR - Free Report) , Adobe (ADBE - Free Report) and Arista Networks (ANET - Free Report) . Asure Software sports a Zacks Rank #1 (Strong Buy), while Adobe and Arista Networks carry a Zacks Rank #2 (Buy) each.
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NXP Semiconductors (NXPI) Q3 Earnings Beat, Revenues Fall Y/Y
NXP Semiconductors N.V. (NXPI - Free Report) delivered third-quarter 2023 non-GAAP earnings of $3.70 per share, which outpaced the Zacks Consensus Estimate by 3.35%. The figure decreased 2.9% year over year.
Revenues of $3.43 billion surpassed the Zacks Consensus Estimate of $3.39 billion. The figure was down 0.3% from the year-ago level.
This was attributed to sluggishness in the Industrial & IoT and Mobile end markets during the reported quarter.
The company witnessed strong momentum in the Automotive and Communication Infrastructure & Others markets.
NXPI has returned 14.9% in the year-to-date period, outperforming the industry’s growth of 8.1%.
NXP Semiconductors N.V. Price, Consensus and EPS Surprise
NXP Semiconductors N.V. price-consensus-eps-surprise-chart | NXP Semiconductors N.V. Quote
End-Market Detail
Automotive generated $1.89 billion in revenues (55% of total revenues), reflecting a year-over-year increase of 5%, driven by innovation in system solutions. The figure surpassed the Zacks Consensus Estimate of $1.88 billion.
Revenues from Industrial & IoT were $607 million (17.7% of total revenues), down 15% from the prior-year quarter’s level. The reported figure came ahead of the consensus mark of $589.5 million.
Revenues from Mobile were $377 million (11% of total revenues), down 8% from the year-ago period’s level. The figure beat the Zacks Consensus Estimate of $349 million.
Communication Infrastructure & Others generated $559 million in revenues (16.3% of total revenues), up 8% year over year. The new cellular standards contributed well to segmental growth. The reported figure missed the consensus mark of $565.06 million.
Operating Results
The non-GAAP gross margin was 58.5%, which expanded 50 basis points (bps) from the year-ago quarter’s level.
Research and development (R&D) expenses were $601 million, up 9.7% year over year. Selling, general and administrative (SG&A) expenses increased 1.7% year over year to $294 million.
As a percentage of revenues, R&D expenses expanded 160 bps year over year to 17.5% and SG&A expenses increased 20 bps year over year to 8.6%.
The non-GAAP operating margin of 35% for the reported quarter contracted 190 bps from the prior-year period’s figure.
Balance Sheet & Cash Flow
As of Oct 1, 2023, the cash and cash equivalent balance was $4.04 billion, up from $3.86 million as of Jul 2, 2023.
Long-term debt was $10.173 billion at the end of the quarter under review compared with $10.171 billion at the end of the last reported quarter.
NXPI generated a cash flow of $988 million in the third quarter of 2023, up from $756 million in the previous quarter.
The company’s capex investment was $200 million in the reported quarter. NXPI generated a free cash flow of $788 million in the quarter.
During the third quarter, it made dividend payments of $262 million and repurchased shares worth $306 million.
Guidance
For fourth-quarter 2023, NXP Semiconductors expects revenues of $3.3-$3.5 billion, suggesting a decline of 1% year over year at the midpoint. The Zacks Consensus Estimate for revenues is pegged at $3.41 billion.
It expects a non-GAAP gross margin between 58% and 59%. The non-GAAP operating margin is anticipated to be between 34.5% and 36.3%.
The company anticipates non-GAAP earnings within the range of $3.44-$3.86 per share. The consensus estimates for the same is pegged at $3.59 per share.
Zacks Rank & Stocks to Consider
NXP Semiconductors currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader technology sector are Asure Software (ASUR - Free Report) , Adobe (ADBE - Free Report) and Arista Networks (ANET - Free Report) . Asure Software sports a Zacks Rank #1 (Strong Buy), while Adobe and Arista Networks carry a Zacks Rank #2 (Buy) each.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Asure Software shares have lost 9.1% in the year-to-date period. The long-term earnings growth rate for ASUR is currently projected at 27%.
Adobe shares have gained 67.5% in the year-to-date period. The long-term earnings growth rate for ADBE is currently projected at 13.54%.
Arista Networks shares have increased 74.1% in the year-to-date period. The long-term earnings growth rate for ANET is currently projected at 20.40%.