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NXP Semiconductors N.V. (NXPI - Free Report) reported third-quarter 2021 non-GAAP earnings of $2.82 per share, which outpaced the Zacks Consensus Estimate by 2.9%. Further, the figure increased 65.9% year over year and 18.5% sequentially.
Revenues of $2.86 billion surpassed the Zacks Consensus Estimate of $2.85 billion. The figure was up 26.2% from the year-ago period and 10.2% on a sequential basis.
Top-line growth was driven by a strong performance across automotive, mobile, and industrial and IoT end markets in the reported quarter.
End-Market Detail
Automotive generated $1.5 billion in revenues (contributing 51% to the total revenues), reflecting a year-over-year increase of 51%.
Revenues from Industrial & IoT were $607 million (21% of total revenues), which rose 18% from the prior-year quarter.
Revenues from Mobile were $345 million (12% of total revenues), up 2% from the year-ago level.
Communication Infrastructure & Others generated $454 million in revenues (which contributed 16% to the total revenues), up 0.4% year over year.
NXP Semiconductors N.V. Price, Consensus and EPS Surprise
The non-GAAP gross margin was 56.5%, which expanded 640 basis points (bps) from the year-ago quarter.
Operating expenses were $872 million, down 17.7% year over year. As a percentage of revenues, the figure significantly contracted to 30.5% from 46.7% in the prior-year quarter.
The non-GAAP operating margin of 33.5% for the reported quarter expanded 770 bps from the prior-year period.
Balance Sheet & Cash Flow
As of Oct 3, 2021, cash and cash equivalent balance were $2.3 billion compared with $2.9 billion as of Jul 4, 2021.
Inventories were $1.17 billion at the end of the third quarter, up from $1.12 billion in the second quarter. Accounts receivables decreased to $979 million from $991 million in the previous quarter.
Long-term debt was $8.6 billion at the end of the quarter under review compared with $9.6 billion in the last reported quarter.
The company generated a cash flow of $924 million in the third quarter, up from $636 million in the second quarter.
Its capex investment stood at $200 million. It generated a free cash flow of $724 million in the reported quarter.
In the third quarter, NXP Semiconductors returned $1.3 billion to shareholders primarily through share repurchases and dividend payments.
4Q21 Guidance
For fourth-quarter 2021, the company expects revenues of $2.925-$3.075 billion, suggesting year-over-year growth of 17-23%. The Zacks Consensus Estimate is pegged at $2.9 billion, which is lower than the mid-point of NXP Semiconductors’ expected range.
The company expects a non-GAAP gross margin between 56% and 57%. The non-GAAP operating margin is anticipated between 33.1% and 34.5%.
Zacks Rank & Other Stocks to Consider
Currently, NXP Semiconductors has a Zacks Rank #3 (Hold).
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NXP Semiconductors (NXPI) Q3 Earnings Beat, Revenues Rise Y/Y
NXP Semiconductors N.V. (NXPI - Free Report) reported third-quarter 2021 non-GAAP earnings of $2.82 per share, which outpaced the Zacks Consensus Estimate by 2.9%. Further, the figure increased 65.9% year over year and 18.5% sequentially.
Revenues of $2.86 billion surpassed the Zacks Consensus Estimate of $2.85 billion. The figure was up 26.2% from the year-ago period and 10.2% on a sequential basis.
Top-line growth was driven by a strong performance across automotive, mobile, and industrial and IoT end markets in the reported quarter.
End-Market Detail
Automotive generated $1.5 billion in revenues (contributing 51% to the total revenues), reflecting a year-over-year increase of 51%.
Revenues from Industrial & IoT were $607 million (21% of total revenues), which rose 18% from the prior-year quarter.
Revenues from Mobile were $345 million (12% of total revenues), up 2% from the year-ago level.
Communication Infrastructure & Others generated $454 million in revenues (which contributed 16% to the total revenues), up 0.4% year over year.
NXP Semiconductors N.V. Price, Consensus and EPS Surprise
NXP Semiconductors N.V. price-consensus-eps-surprise-chart | NXP Semiconductors N.V. Quote
Operating Results
The non-GAAP gross margin was 56.5%, which expanded 640 basis points (bps) from the year-ago quarter.
Operating expenses were $872 million, down 17.7% year over year. As a percentage of revenues, the figure significantly contracted to 30.5% from 46.7% in the prior-year quarter.
The non-GAAP operating margin of 33.5% for the reported quarter expanded 770 bps from the prior-year period.
Balance Sheet & Cash Flow
As of Oct 3, 2021, cash and cash equivalent balance were $2.3 billion compared with $2.9 billion as of Jul 4, 2021.
Inventories were $1.17 billion at the end of the third quarter, up from $1.12 billion in the second quarter. Accounts receivables decreased to $979 million from $991 million in the previous quarter.
Long-term debt was $8.6 billion at the end of the quarter under review compared with $9.6 billion in the last reported quarter.
The company generated a cash flow of $924 million in the third quarter, up from $636 million in the second quarter.
Its capex investment stood at $200 million. It generated a free cash flow of $724 million in the reported quarter.
In the third quarter, NXP Semiconductors returned $1.3 billion to shareholders primarily through share repurchases and dividend payments.
4Q21 Guidance
For fourth-quarter 2021, the company expects revenues of $2.925-$3.075 billion, suggesting year-over-year growth of 17-23%. The Zacks Consensus Estimate is pegged at $2.9 billion, which is lower than the mid-point of NXP Semiconductors’ expected range.
The company expects a non-GAAP gross margin between 56% and 57%. The non-GAAP operating margin is anticipated between 33.1% and 34.5%.
Zacks Rank & Other Stocks to Consider
Currently, NXP Semiconductors has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Lam Research (LRCX - Free Report) , Applied Materials (AMAT - Free Report) and Trimble (TRMB - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rates for Lam Research, Applied Materials and Trimble are currently projected at 27.24%, 19.35% and 10%, respectively.