NXP Semiconductors N.V. (NXPI Quick QuoteNXPI - Free Report) delivered first-quarter 2024 non-GAAP earnings of $3.24 per share, which outpaced the Zacks Consensus Estimate by 1.9%. The figure increased 1.6% year over year.

Revenues of $3.13 billion missed the Zacks Consensus Estimate by 0.02%. The figure rose 0.2% from the year-ago level.

Strong momentum across the Industrial & IoT, and Mobile end markets contributed well.

NXPI has gained 10.9% in the year-to-date period, outperforming the industry’s growth of 3%.

However, the company witnessed sluggishness in the Automotive, and Communication Infrastructure & Others markets.

End-Market Detail

Automotive generated $1.804 billion in revenues (58% of the total revenues), reflecting a year-over-year decrease of 1%. The figure surpassed the Zacks Consensus Estimate of $1.803 billion.

Revenues from Industrial & IoT were $574 million (18% of the total revenues), up 14% from the prior-year quarter. The reported figure lagged the consensus mark of $582 million.

Revenues from Mobile were $349 million (11% of the total revenues), up 34% from the year-ago period. The figure beat the Zacks Consensus Estimate of $344 million.

Communication Infrastructure & Others generated $399 million in revenues (13% of the total revenues), down 25% year over year. The reported figure was in line with the consensus mark.

Operating Results

The non-GAAP gross margin was 58.2%, which was flat year over year.

Research and development (R&D) expenses were $564 million, down 2.2% year over year. Selling, general and administrative (SG&A) expenses increased 9.3% year over year to $306 million. As a percentage of revenues, R&D expenses contracted 50 basis points (bps) year over year to 18%, while SG&A expenses expanded 80 bps year over year to 9.8%.

The non-GAAP operating margin of 34.5% for the reported quarter contracted 30 bps from the prior-year period.

Balance Sheet & Cash Flow

As of Mar 31, 2024, the cash and cash equivalent, and short-term deposits balance was $3.3 billion, down from $4.27 billion as of Dec 31, 2023.

The long-term debt was $10.178 billion at the end of the quarter under review compared with $10.175 billion at the end of the last reported quarter.

NXPI generated a cash flow of $851 million in the first quarter of 2024, down from $1.14 billion in the previous quarter.

The company’s capex investment was $224 million in the reported quarter. NXPI generated a free cash flow of $627 million in the quarter.

During the first quarter, the company made dividend payments of $261 million and repurchased shares worth $303 million.

Guidance

For second-quarter 2024, NXP Semiconductors expects revenues of $3.025-$3.225 billion, indicating a year-over-year fall of 5% at the mid-point. The Zacks Consensus Estimate for revenues is pegged at $3.12 billion.

It expects the non-GAAP gross margin between 58% and 59%. The non-GAAP operating margin is anticipated between 33.1% and 35%.

The company anticipates non-GAAP earnings of $3.00-$3.41 per share. The consensus estimate for the same is pegged at $3.15.

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 Quick QuoteANET - Free Report) , Dell Technologies (DELL Quick QuoteDELL - Free Report) and Badger Meter (BMI Quick QuoteBMI - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Arista Networks have gained 4.2% in the year-to-date period. The long-term earnings growth rate for ANET is 17.48%.

Shares of Dell Technologies have gained 52.3% in the year-to-date period. The long-term earnings growth rate for DELL is projected at 12%.

Shares of Badger Meter have gained 17.5% in the year-to-date period. The long-term earnings growth rate for BMI is 15.57%.