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NXP Semiconductors N.V. (NXPI - Free Report) delivered fourth-quarter 2023 non-GAAP earnings of $3.71 per share, which outpaced the Zacks Consensus Estimate by 1.92%. The figure decreased 0.5% year over year.
Revenues of $3.42 billion surpassed the Zacks Consensus Estimate of $3.395 billion. The figure was up 3% from the year-ago level.
This was attributed to strong momentum in the Automotive and Industrial & IoT markets.
The company witnessed sluggishness in the Communication Infrastructure & Others and Mobile end markets during the reported quarter.
NXPI has returned 21.1% in the past year, outperforming the industry’s growth of 6.2%.
NXP Semiconductors N.V. Price, Consensus and EPS Surprise
Automotive generated $1.9 billion in revenues (55.5% 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 $1.89 billion.
Revenues from Industrial & IoT were $662 million (19.3% of total revenues), up 9% from the prior-year quarter’s level. The growth was attributed to growing momentum in scalable processing and robust solutions. The reported figure came ahead of the consensus mark of $644.19 million.
Revenues from Mobile were $406 million (11.9% of total revenues), down 0.5% from the year-ago period’s level. The figure beat the Zacks Consensus Estimate of $384.8 million.
Communication Infrastructure & Others generated $455 million in revenues (13.3% of total revenues), down 8% year over year. The reported figure missed the consensus mark of $469.25 million.
Operating Results
The non-GAAP gross margin was 58.7%, which expanded 70 basis points (bps) from the year-ago quarter’s level.
Research and development (R&D) expenses were $651 million, up 20.6% year over year. Selling, general and administrative (SG&A) expenses increased by 19.2% year over year to $311 million.
As a percentage of revenues, R&D expenses expanded 270 bps year over year to 19% and SG&A expenses increased 120 bps year over year to 9.1%.
The non-GAAP operating margin of 35.6% for the reported quarter contracted 90 bps from the prior-year period’s figure.
Balance Sheet & Cash Flow
As of Dec 31, 2023, the cash and cash equivalent balance was $3.86 billion, down from $4.04 billion as of Oct 1, 2023.
Long-term debt was $10.175 billion at the end of the quarter under review compared with $10.173 billion at the end of the last reported quarter.
NXPI generated a cash flow of $1.14 billion in the fourth quarter of 2023, up from $988 million in the previous quarter.
The company’s capex investment was $175 million in the reported quarter. NXPI generated a free cash flow of $962 million in the quarter.
During the fourth quarter, the company made dividend payments of $261 million and repurchased shares worth $434 million.
Guidance
For first-quarter 2024, NXP Semiconductors expects revenues of $3.025-$3.225 billion, flat year over year at the midpoint. The Zacks Consensus Estimate for revenues is pegged at $3.18 billion.
It expects a non-GAAP gross margin between 57.5% and 58.5%. The non-GAAP operating margin is anticipated to be between 32.9% and 34.8%.
The company anticipates non-GAAP earnings within the range of $2.97-$3.38 per share. The consensus estimate for the same is pegged at $3.19 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 Arista Networks (ANET - Free Report) , Badger Meter (BMI - Free Report) and AMETEK (AME - Free Report) . Arista Networks sports a Zacks Rank #1 (Strong Buy), while Badger Meter and AMETEK carry a Zacks Rank #2 (Buy) each.
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NXP Semiconductors (NXPI) Q4 Earnings Beat, Revenues Rise Y/Y
NXP Semiconductors N.V. (NXPI - Free Report) delivered fourth-quarter 2023 non-GAAP earnings of $3.71 per share, which outpaced the Zacks Consensus Estimate by 1.92%. The figure decreased 0.5% year over year.
Revenues of $3.42 billion surpassed the Zacks Consensus Estimate of $3.395 billion. The figure was up 3% from the year-ago level.
This was attributed to strong momentum in the Automotive and Industrial & IoT markets.
The company witnessed sluggishness in the Communication Infrastructure & Others and Mobile end markets during the reported quarter.
NXPI has returned 21.1% in the past year, outperforming the industry’s growth of 6.2%.
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 $1.9 billion in revenues (55.5% 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 $1.89 billion.
Revenues from Industrial & IoT were $662 million (19.3% of total revenues), up 9% from the prior-year quarter’s level. The growth was attributed to growing momentum in scalable processing and robust solutions. The reported figure came ahead of the consensus mark of $644.19 million.
Revenues from Mobile were $406 million (11.9% of total revenues), down 0.5% from the year-ago period’s level. The figure beat the Zacks Consensus Estimate of $384.8 million.
Communication Infrastructure & Others generated $455 million in revenues (13.3% of total revenues), down 8% year over year. The reported figure missed the consensus mark of $469.25 million.
Operating Results
The non-GAAP gross margin was 58.7%, which expanded 70 basis points (bps) from the year-ago quarter’s level.
Research and development (R&D) expenses were $651 million, up 20.6% year over year. Selling, general and administrative (SG&A) expenses increased by 19.2% year over year to $311 million.
As a percentage of revenues, R&D expenses expanded 270 bps year over year to 19% and SG&A expenses increased 120 bps year over year to 9.1%.
The non-GAAP operating margin of 35.6% for the reported quarter contracted 90 bps from the prior-year period’s figure.
Balance Sheet & Cash Flow
As of Dec 31, 2023, the cash and cash equivalent balance was $3.86 billion, down from $4.04 billion as of Oct 1, 2023.
Long-term debt was $10.175 billion at the end of the quarter under review compared with $10.173 billion at the end of the last reported quarter.
NXPI generated a cash flow of $1.14 billion in the fourth quarter of 2023, up from $988 million in the previous quarter.
The company’s capex investment was $175 million in the reported quarter. NXPI generated a free cash flow of $962 million in the quarter.
During the fourth quarter, the company made dividend payments of $261 million and repurchased shares worth $434 million.
Guidance
For first-quarter 2024, NXP Semiconductors expects revenues of $3.025-$3.225 billion, flat year over year at the midpoint. The Zacks Consensus Estimate for revenues is pegged at $3.18 billion.
It expects a non-GAAP gross margin between 57.5% and 58.5%. The non-GAAP operating margin is anticipated to be between 32.9% and 34.8%.
The company anticipates non-GAAP earnings within the range of $2.97-$3.38 per share. The consensus estimate for the same is pegged at $3.19 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 Arista Networks (ANET - Free Report) , Badger Meter (BMI - Free Report) and AMETEK (AME - Free Report) . Arista Networks sports a Zacks Rank #1 (Strong Buy), while Badger Meter and AMETEK carry a Zacks Rank #2 (Buy) each.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks shares have gained 110.5% in the past year. The long-term earnings growth rate for ANET is currently projected at 19.77%.
Badger Meter shares have gained 15.7% in the past year. The long-term earnings growth rate for BMI is currently projected at 12.27%.
AMETEK shares have gained 13.5% in the past year. The long-term earnings growth rate for AME is currently projected at 9.58%.