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NXP Semiconductors N.V. (NXPI - Free Report) reported fourth-quarter 2022 non-GAAP earnings of $3.73 per share, which outpaced the Zacks Consensus Estimate by 3.6%. Further, the figure increased 21.1% year over year.
Revenues of $3.31 billion surpassed the Zacks Consensus Estimate of $3.28 billion. The figure was up 9% from the year-ago period’s level. It also came within the management’s guided range of $3.2-$3.4 billion.
Top-line growth was driven by strong momentum across the Automotive, Mobile and Communication Infrastructure & Others end markets in the reported quarter.
End-Market Detail
Automotive generated $1.81 billion in revenues (54.5% of total revenues), reflecting a year-over-year increase of 17%. Growth was driven by innovation in systems solutions.
Revenues from Industrial & IoT were $605 million (18.3% of total revenues), down 8% from the prior-year quarter’s level. Softening demand environment in the IoT market was a headwind.
Revenues from Mobile were $408 million (12.3% of total revenues), up 9% from the year-ago period’s level. The increment in revenues was driven by an increased attach rate.
Communication Infrastructure & Others generated $494 million in revenues (14.9% of total revenues), up 8% year over year. The new cellular standards contributed well to segmental growth.
NXP Semiconductors N.V. Price, Consensus and EPS Surprise
The non-GAAP gross margin was 58%, which expanded 70 basis points (bps) from the year-ago quarter’s level.
Research and development (R&D) expenses were $540 million, up 6.5% year over year. Selling, general and administrative (SG&A) expenses increased 1.6% year over year to $261 million. As a percentage of revenues, R&D expenses contracted 40 bps year over year to 16.3% and SG&A expenses contracted 50 bps year over year to 7.9%.
The non-GAAP operating margin of 36.5% for the reported quarter expanded 160 bps from the prior-year period’s figure.
Balance Sheet & Cash Flow
As of Dec 31, 2022, cash and cash equivalent balance was $3.84 billion, up from $3.76 million as of Oct 2, 2022.
Inventories were $1.78 billion at the end of the fourth quarter of 2022, up from $1.58 billion at the end of third-quarter 2022. Accounts receivables decreased to $960 million from $1.01 billion in the previous quarter.
Long-term debt was $11.165 billion at the end of the quarter under review compared with $11.162 billion at the end of the last-reported quarter.
NXPI generated a cash flow of $1.08 billion in the fourth quarter of 2022, down from $1.14 billion in the previous quarter.
The company’s capex investment stood at $233 million in the reported quarter. NXPI generated a free cash flow of $843 million in the fourth quarter.
During the fourth quarter, the company repurchased shares worth $475 million and made dividend payments of $221 million.
Guidance
For first-quarter 2023, NXP Semiconductors expects revenues of $2.9-$3.1 billion, suggesting a decline of 8-1% from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for revenues is pegged at $3.13 billion.
Further, it expects a non-GAAP gross margin between 57.5% and 58.5%. The non-GAAP operating margin is anticipated to be between 33.4% and 35.3%.
The company anticipates non-GAAP earnings within the range of $2.82-$3.22 per share. The Zacks Consensus Estimate for the same is pegged at $3.09 per share.
Zacks Rank & Stocks to Consider
Currently, NXP Semiconductors has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer & Technology sector are Agilent Technologies (A - Free Report) , Arista Networks (ANET - Free Report) and Asure Software (ASUR - Free Report) . Agilent Technologies sports a Zacks Rank #1 (Strong Buy), while Arista Networks and Asure Software carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Agilent has gained 7.6% in the past year. A’s long-term earnings growth rate is currently projected at 10%.
Arista Networks has lost 0.4% in the past year. The long-term earnings growth rate for ANET is currently projected at 17.5%.
Asure Software has gained 45% in the past year. The long-term earnings growth rate for ASUR is currently projected at 23%.
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NXP Semiconductors (NXPI) Q4 Earnings Beat, Revenues Rise Y/Y
NXP Semiconductors N.V. (NXPI - Free Report) reported fourth-quarter 2022 non-GAAP earnings of $3.73 per share, which outpaced the Zacks Consensus Estimate by 3.6%. Further, the figure increased 21.1% year over year.
Revenues of $3.31 billion surpassed the Zacks Consensus Estimate of $3.28 billion. The figure was up 9% from the year-ago period’s level. It also came within the management’s guided range of $3.2-$3.4 billion.
Top-line growth was driven by strong momentum across the Automotive, Mobile and Communication Infrastructure & Others end markets in the reported quarter.
End-Market Detail
Automotive generated $1.81 billion in revenues (54.5% of total revenues), reflecting a year-over-year increase of 17%. Growth was driven by innovation in systems solutions.
Revenues from Industrial & IoT were $605 million (18.3% of total revenues), down 8% from the prior-year quarter’s level. Softening demand environment in the IoT market was a headwind.
Revenues from Mobile were $408 million (12.3% of total revenues), up 9% from the year-ago period’s level. The increment in revenues was driven by an increased attach rate.
Communication Infrastructure & Others generated $494 million in revenues (14.9% of total revenues), up 8% year over year. The new cellular standards contributed well to segmental growth.
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 58%, which expanded 70 basis points (bps) from the year-ago quarter’s level.
Research and development (R&D) expenses were $540 million, up 6.5% year over year. Selling, general and administrative (SG&A) expenses increased 1.6% year over year to $261 million. As a percentage of revenues, R&D expenses contracted 40 bps year over year to 16.3% and SG&A expenses contracted 50 bps year over year to 7.9%.
The non-GAAP operating margin of 36.5% for the reported quarter expanded 160 bps from the prior-year period’s figure.
Balance Sheet & Cash Flow
As of Dec 31, 2022, cash and cash equivalent balance was $3.84 billion, up from $3.76 million as of Oct 2, 2022.
Inventories were $1.78 billion at the end of the fourth quarter of 2022, up from $1.58 billion at the end of third-quarter 2022. Accounts receivables decreased to $960 million from $1.01 billion in the previous quarter.
Long-term debt was $11.165 billion at the end of the quarter under review compared with $11.162 billion at the end of the last-reported quarter.
NXPI generated a cash flow of $1.08 billion in the fourth quarter of 2022, down from $1.14 billion in the previous quarter.
The company’s capex investment stood at $233 million in the reported quarter. NXPI generated a free cash flow of $843 million in the fourth quarter.
During the fourth quarter, the company repurchased shares worth $475 million and made dividend payments of $221 million.
Guidance
For first-quarter 2023, NXP Semiconductors expects revenues of $2.9-$3.1 billion, suggesting a decline of 8-1% from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for revenues is pegged at $3.13 billion.
Further, it expects a non-GAAP gross margin between 57.5% and 58.5%. The non-GAAP operating margin is anticipated to be between 33.4% and 35.3%.
The company anticipates non-GAAP earnings within the range of $2.82-$3.22 per share. The Zacks Consensus Estimate for the same is pegged at $3.09 per share.
Zacks Rank & Stocks to Consider
Currently, NXP Semiconductors has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer & Technology sector are Agilent Technologies (A - Free Report) , Arista Networks (ANET - Free Report) and Asure Software (ASUR - Free Report) . Agilent Technologies sports a Zacks Rank #1 (Strong Buy), while Arista Networks and Asure Software carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Agilent has gained 7.6% in the past year. A’s long-term earnings growth rate is currently projected at 10%.
Arista Networks has lost 0.4% in the past year. The long-term earnings growth rate for ANET is currently projected at 17.5%.
Asure Software has gained 45% in the past year. The long-term earnings growth rate for ASUR is currently projected at 23%.