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NXP Semiconductors N.V. (NXPI - Free Report) reported third-quarter 2022 non-GAAP earnings of $4.98 per share, which outpaced the Zacks Consensus Estimate by 36%. Further, the figure increased 77% year over year and 5%, sequentially.
Revenues of $3.45 billion surpassed the Zacks Consensus Estimate by 1%. The figure was up 20% from the year-ago period’s level and 4%, sequentially. It was also close to the upper end of the guided range of $3.35-$3.50 billion.
Top-line growth was driven by a strong performance across the automotive, industrial & IoT, mobile, and communication infrastructure & others’ end markets in the reported quarter.
NXP Semiconductors N.V. Price, Consensus and EPS Surprise
Automotive generated $1.80 billion of revenues (contributing 52% to the total revenues), reflecting a year-over-year increase of 24%. Growth was driven by innovation in systems solutions. NXPI’s robust sensing, processing and control applications aided revenue growth.
Revenues from Industrial & IoT were $713 million (21% of the top line), which rose 17% from the prior-year quarter’s level. Growing momentum in connected edge processing, connectivity and security remained a tailwind.
Revenues from Mobile were $410 million (12% of total revenues), up 19% from the year-ago period’s level. The increment in revenues was driven by an increased attach rate. Strong momentum in secure mobile wallet, access and identification supported revenue growth.
Communication Infrastructure & Others generated $518 million of revenues (which contributed 15% to the total revenues), up 14% year over year. The new cellular standards contributed well to segmental growth. NXP Semiconductors’ strong position in high-power RF power remained a positive.
Operating Results
The non-GAAP gross margin was 58%, which expanded 150 basis points (bps) from the year-ago quarter’s level.
Research and development (R&D) expenses were $548 million, up 11% year over year. Selling, general and administrative (SG&A) expenses increased 19% year over year to $289 million. As a percentage of revenues, R&D expenses contracted 100 bps year over year to 16%, while SG&A expenses matched the year-ago quarter’s figure of 8%.
The non-GAAP operating margin of 36.9% for the reported quarter expanded 340 bps from the prior-year period’s figure.
Balance Sheet & Cash Flow
As of Oct 2, 2022, cash and cash equivalent balance was $3.76 billion, up from $3.55 billion as of Jul 3, 2022.
Inventories were $1.58 billion at the end of the third quarter of 2022, up from $1.46 billion in the second quarter of 2022. Accounts receivables increased to $1.01 billion from $996 million in the previous quarter.
Long-term debt was $11.162 billion at the end of the quarter under review compared with $11.160 billion in the last reported quarter.
NXPI generated a cash flow of $1.14 billion in the third quarter of 2022, up from $819 million in the previous quarter.
Its capex investment stood at $281 million, up from $268 million in the prior quarter. NXPI generated a free cash flow of $863 million in the reported quarter.
Q422 Guidance
For fourth-quarter 2022, NXP Semiconductors expects revenues of $3.2-$3.4 billion, suggesting growth of 5-12% from the year-ago quarter’s reported figure. The Zacks Consensus Estimate is pegged at $3.4 billion.
NXPI expects a non-GAAP gross margin between 57.3% and 58.3%. The non-GAAP operating margin is anticipated between 35.1% and 36.8%.
Zacks Rank & Stocks to Consider
Currently, NXP Semiconductors has a Zacks Rank #4 (Sell).
US Foods is set to report third-quarter 2022 results on Nov 10. The Zacks Consensus Estimate for USFD’s earnings is pegged at 59 cents per share, suggesting an increase of 22.9% from the prior-year period’s reported figure. USFD has lost 14.6% in the year-to-date period. Its long-term earnings growth rate is currently projected at 20%.
The Trade Desk is scheduled to release third-quarter 2022 results on Nov 9. The Zacks Consensus Estimate for TTD’s earnings is pegged at 24 cents per share, suggesting an increase of 33.3% from the prior-year quarter’s reported figure. TTD has lost 41.4% in the year-to-date period. TTD’s long-term earnings growth rate is currently projected at 24%.
Tencent Music is scheduled to release third-quarter 2022 results on Nov 15. The Zacks Consensus Estimate for TME’s earnings is pegged at 11 cents per share, suggesting an increase of 22.2% from the prior-year quarter’s reported figure. TME has lost 46.5% in the year-to-date period. TME’s long-term earnings growth rate is currently projected at 17.9%.
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NXP Semiconductors (NXPI) Q3 Earnings Beat, Revenues Rise Y/Y
NXP Semiconductors N.V. (NXPI - Free Report) reported third-quarter 2022 non-GAAP earnings of $4.98 per share, which outpaced the Zacks Consensus Estimate by 36%. Further, the figure increased 77% year over year and 5%, sequentially.
Revenues of $3.45 billion surpassed the Zacks Consensus Estimate by 1%. The figure was up 20% from the year-ago period’s level and 4%, sequentially. It was also close to the upper end of the guided range of $3.35-$3.50 billion.
Top-line growth was driven by a strong performance across the automotive, industrial & IoT, mobile, and communication infrastructure & others’ end markets in the reported quarter.
NXP Semiconductors N.V. Price, Consensus and EPS Surprise
NXP Semiconductors N.V. price-consensus-eps-surprise-chart | NXP Semiconductors N.V. Quote
End-Market Detail
Automotive generated $1.80 billion of revenues (contributing 52% to the total revenues), reflecting a year-over-year increase of 24%. Growth was driven by innovation in systems solutions. NXPI’s robust sensing, processing and control applications aided revenue growth.
Revenues from Industrial & IoT were $713 million (21% of the top line), which rose 17% from the prior-year quarter’s level. Growing momentum in connected edge processing, connectivity and security remained a tailwind.
Revenues from Mobile were $410 million (12% of total revenues), up 19% from the year-ago period’s level. The increment in revenues was driven by an increased attach rate. Strong momentum in secure mobile wallet, access and identification supported revenue growth.
Communication Infrastructure & Others generated $518 million of revenues (which contributed 15% to the total revenues), up 14% year over year. The new cellular standards contributed well to segmental growth. NXP Semiconductors’ strong position in high-power RF power remained a positive.
Operating Results
The non-GAAP gross margin was 58%, which expanded 150 basis points (bps) from the year-ago quarter’s level.
Research and development (R&D) expenses were $548 million, up 11% year over year. Selling, general and administrative (SG&A) expenses increased 19% year over year to $289 million. As a percentage of revenues, R&D expenses contracted 100 bps year over year to 16%, while SG&A expenses matched the year-ago quarter’s figure of 8%.
The non-GAAP operating margin of 36.9% for the reported quarter expanded 340 bps from the prior-year period’s figure.
Balance Sheet & Cash Flow
As of Oct 2, 2022, cash and cash equivalent balance was $3.76 billion, up from $3.55 billion as of Jul 3, 2022.
Inventories were $1.58 billion at the end of the third quarter of 2022, up from $1.46 billion in the second quarter of 2022. Accounts receivables increased to $1.01 billion from $996 million in the previous quarter.
Long-term debt was $11.162 billion at the end of the quarter under review compared with $11.160 billion in the last reported quarter.
NXPI generated a cash flow of $1.14 billion in the third quarter of 2022, up from $819 million in the previous quarter.
Its capex investment stood at $281 million, up from $268 million in the prior quarter. NXPI generated a free cash flow of $863 million in the reported quarter.
Q422 Guidance
For fourth-quarter 2022, NXP Semiconductors expects revenues of $3.2-$3.4 billion, suggesting growth of 5-12% from the year-ago quarter’s reported figure. The Zacks Consensus Estimate is pegged at $3.4 billion.
NXPI expects a non-GAAP gross margin between 57.3% and 58.3%. The non-GAAP operating margin is anticipated between 35.1% and 36.8%.
Zacks Rank & Stocks to Consider
Currently, NXP Semiconductors has a Zacks Rank #4 (Sell).
Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like US Foods (USFD - Free Report) , The Trade Desk (TTD - Free Report) and Tencent Music Entertainment Group (TME - 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.
US Foods is set to report third-quarter 2022 results on Nov 10. The Zacks Consensus Estimate for USFD’s earnings is pegged at 59 cents per share, suggesting an increase of 22.9% from the prior-year period’s reported figure. USFD has lost 14.6% in the year-to-date period. Its long-term earnings growth rate is currently projected at 20%.
The Trade Desk is scheduled to release third-quarter 2022 results on Nov 9. The Zacks Consensus Estimate for TTD’s earnings is pegged at 24 cents per share, suggesting an increase of 33.3% from the prior-year quarter’s reported figure. TTD has lost 41.4% in the year-to-date period. TTD’s long-term earnings growth rate is currently projected at 24%.
Tencent Music is scheduled to release third-quarter 2022 results on Nov 15. The Zacks Consensus Estimate for TME’s earnings is pegged at 11 cents per share, suggesting an increase of 22.2% from the prior-year quarter’s reported figure. TME has lost 46.5% in the year-to-date period. TME’s long-term earnings growth rate is currently projected at 17.9%.