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Chipmaker NXP forecasts profit above estimates on automotive strength
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(Reuters) – Chipmaker NXP Semiconductors forecast first-quarter profit above target and reported better-than-expected revenue for the last quarter on Monday, banking on a strong automotive market, a key consumer of its technology.
(Reuters) – Chipmaker NXP Semiconductors forecast first-quarter profit above target and reported better-than-expected revenue for the last quarter on Monday, banking on a strong automotive market, a key consumer of its technology.
Netherlands-based NXP supplies manufacturers with chips and other technologies needed for high-speed digital processing used in industries such as automotive, manufacturing, telecom and the Internet of Things (IoT).
Manufacturing of light vehicles grew 9% globally last year and hit pre-pandemic production levels, according to a report by S&P Global. Meanwhile, growth in the U.S. auto market was its best since 2019 last year.
The automotive consumer segment grew 5% in the fourth quarter, accounting for 56% of NXP’s overall revenue in 2023.
NXP forecast adjusted profit per share for the March quarter between $2.97 and $3.38. The mid-point of the range is higher than the $3.15 consensus estimates from three analysts, according to LSEG data.
However, the revenue forecast came in at a midpoint of $3.13 billion, shy of expectations of $3.16 billion, due to anticipated weakness in the electric vehicles segment and the Chinese electronic market.
“We are navigating a soft landing by managing what is in our control, especially limiting over-shipment of products to customers,” said Kurt Sievers, NXP president and chief executive officer.
Revenue in the fourth quarter ended December 31, was $3.42 billion, higher than the consensus estimate of $3.40 billion.
Nasdaq-listed shares of NXP rose nearly 3% in trading after the bell. The stock closed 2.8% up on Monday.
(Reporting by Yuvraj Malik in Bengaluru; Editing by Tasim Zahid)
Automotive strength refers to the robust performance and growth of the automotive sector, often driven by increased demand for vehicles and advancements in automotive technology.
Revenue is the total income generated by a company from its business activities, typically from sales of goods and services before any expenses are deducted.
Electric vehicles (EVs) are automobiles that are powered by electric motors instead of internal combustion engines, using electricity stored in batteries.
Adjusted profit per share is a financial metric that reflects a company's profitability on a per-share basis, excluding certain one-time expenses or income for a clearer view of ongoing performance.
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