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Chipmaker NXP forecasts quarterly revenue below estimates on macroeconomic concerns
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(Reuters) – NXP Semiconductors NV forecast fourth-quarter revenue below estimates on Monday, as it anticipates uncertain demand and broader macroeconomic weakness in Europe and the Americas.
Nasdaq-listed shares of NXP fell 5% in trading after the bell.
Enterprises cutting down on spending due to budget constraints in a sluggish economy has impacted the Eindhoven, Netherlands-based chipmaker.
NXP provides manufacturers with chips and other technology essential for high-speed digital processing utilized in sectors like automotive, manufacturing, telecommunications and the Internet of Things (IoT).
“While we experienced some strength against our expectations in the communication infrastructure, mobile and automotive end markets, we were confronted with increasing macro related weakness in the industrial and IoT market,” said CEO Kurt Sievers.
The Dutch firm expects fourth-quarter revenue with a mid-point of $3.10 billion, compared to analysts’ average estimate of $3.36 billion, according to data compiled by LSEG.
Industrial and IoT revenue fell 7% in the third quarter ended Sept. 29, while mobile revenue was up 8%.
Revenue from the automotive segment – NXP’s biggest – fell 3% to $1.83 billion.
NXP posted third quarter revenue of $3.25 billion, in line with analyst estimates.
Chipmaker ON Semiconductor also projected fourth-quarter revenue and profit below Wall Street estimates in October, citing persistent soft demand for semiconductors in the auto sector.
(Reporting by Juby Babu in Mexico City; Editing by Shailesh Kuber)
Macroeconomic weakness refers to a decline in the overall economic performance of a region, characterized by reduced consumer spending, lower production, and higher unemployment rates, impacting businesses and markets.
The Internet of Things (IoT) is a network of interconnected devices that communicate and exchange data over the internet. It enables automation and enhances efficiency across various sectors, including manufacturing and automotive.
Market capitalisation is the total market value of a company's outstanding shares of stock. It is calculated by multiplying the share price by the total number of shares, indicating the company's size and investment potential.
The automotive sector encompasses all businesses involved in the design, development, manufacturing, marketing, and selling of motor vehicles. It includes car manufacturers, suppliers, and dealerships.
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