NXP Semiconductors perks up amid mixed Q3 results, guidance

[NXP Semiconductors company office in Silicon Valley]
Michael Vi

NXP Semiconductors (NASDAQ:NXPI [https://seekingalpha.com/symbol/NXPI]) shares rose 2% in extended trading on Monday after the analog and industrial chipmaker reported mixed third-quarter results and guidance compared to Wall Street's forecast.

For the period ending Sept. 28, NXP earned an adjusted $3.11 per share as revenue fell 2% year-over-year to come in at $3.17B, which exceeded the mid-point of the company's prior guidance.

Automotive sales accounted for $1.837B in revenue, flat when compared to the year-ago quarter. Industrial and internet of things revenue came in at $579M, while mobile revenue for the quarter was $430M, up 6% year-over-year. Communications Infrastructure & Other revenue accounted for $327 in sales, down 27% year-over-year.

Adjusted gross margin during the period was 57% while adjusted operating margin was 33.8%. Adjusted free cash flow during the quarter was $509M, down 14% year-over-year.

Analysts had expected the company to earn an adjusted $3.14 per share on $3.16B in revenue.

“NXP reported quarterly revenue of $3.17 billion, exceeding the midpoint of our guidance,” said Rafael Sotomayor, NXP President and incoming CEO. “We experienced broad-based sequential improvement across all regions and end markets. Our outlook reflects the strength of our company specific growth drivers and signs of a cyclical recovery. We remain focused on disciplined investment and portfolio enhancement to drive profitable growth, while maintaining control over the factors we can influence.”

NXP announced [https://seekingalpha.com/news/4436274-nxp-semiconductors-slumps-as-management-shakeup-overshadows-q1-results] in April that Sotomayor is replacing current CEO Kurt Sievers as CEO on October 28.

For the coming quarter, NXP expects to earn between $3.07 and $3.49, with the midpoint of $3.28 per share below the $3.30 estimate. Sales are expected to be between $3.2B and $3.4B, with the $3.3B midpoint above the $3.23B estimate.

Adjusted gross margins are forecast to be between 57% and 58% while its adjusted operating margin is expected to be between 33.7% and 35.4%.

The company will host a conference call at 8 a.m. EST on Tuesday to discuss the results.

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