NXP Semiconductors’ Sales Outlook Tops The Street After 4Q Beat

NXP Semiconductors provided a first-quarter revenue outlook which exceeded analysts’ expectations as the chipmaker reported better-than-expected 4Q results. However, shares declined 3.2% in Monday’s extended trading session.

NXP Semiconductors’ (NXPI) 4Q earnings of $2.22 per share grew 12.1% year-over-year, and topped analysts’ expectations of $2.10 per share. The company’s revenues of $2.51 billion beat the Street’s estimates of $2.46 billion, and increased about 9% year-over-year.

Its adjusted gross margin stood at 52.9%, compared to consensus estimates of 52.7% and the company’s guidance range of 50.9%-51.6%. The operating margin of 30.5% also came in ahead of analysts’ expectations of 29.8% in 4Q.

As for 1Q, the company expects to generate revenues in the range of $2.475-2.625 billion, versus consensus estimates of $2.32 billion. NXP forecasted gross margin in the range of 53.2%-53.8%, compared to a consensus of 53%. The company anticipates its 1Q operating margin to be in the range of 29.8%-30.9%, which came in above analysts’ expectations of 28.5%. (See NXP Semiconductors stock analysis on TipRanks)

Following the results, Oppenheimer analyst Rick Schafer maintained a Hold rating on the stock.

In a note to investors, Schafer said, “4Q upside was led by mobile (13% ahead of consensus estimate and up 23% Y/Y), which more than offset comm infrastructure declines (8% below consensus estimate and down 14% Y/Y). Auto was up 24% Q/Q (+43% Q/Q in 3Q) and 9% Y/Y as the industry recovers from 2Q trough. Mobile was up 21% Q/Q reflecting strong iPhone 12 demand. Channel inventory dipped to 1.6 months (vs. historical 2.4 months), as demand likely outpaced supply given widespread reports of auto supply chain shortages.” 

Meanwhile, the rest of the Street has a cautiously optimistic outlook with a Moderate Buy consensus rating based on 11 Buys and 5 Holds. The average analyst price target of $181.73 implies upside potential of about 6% to current levels. Shares increased 37% in one year.

Meanwhile, the TipRanks’ stock investors tool shows that investors currently have a Very Negative stance on NXPI.

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