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NXP (NXPI) Up 9.2% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for NXP Semiconductors (NXPI - Free Report) . Shares have added about 9.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is NXP due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
NXP Semiconductors Q1 Earnings Beat Estimates
NXP Semiconductors delivered first-quarter 2024 non-GAAP earnings of $3.24 per share, which outpaced the Zacks Consensus Estimate by 1.9%. The figure increased 1.6% year over year.
Revenues of $3.13 billion missed the Zacks Consensus Estimate by 0.02%. The figure rose 0.2% from the year-ago level.
Strong momentum across the Industrial & IoT, and Mobile end markets contributed well.
However, the company witnessed sluggishness in the Automotive, and Communication Infrastructure & Others markets.
End-Market Detail
Automotive generated $1.804 billion in revenues (58% of the total revenues), reflecting a year-over-year decrease of 1%. The figure surpassed the Zacks Consensus Estimate of $1.803 billion.
Revenues from Industrial & IoT were $574 million (18% of the total revenues), up 14% from the prior-year quarter. The reported figure lagged the consensus mark of $582 million.
Revenues from Mobile were $349 million (11% of the total revenues), up 34% from the year-ago period. The figure beat the Zacks Consensus Estimate of $344 million.
Communication Infrastructure & Others generated $399 million in revenues (13% of the total revenues), down 25% year over year. The reported figure was in line with the consensus mark.
Operating Results
The non-GAAP gross margin was 58.2%, which was flat year over year.
Research and development (R&D) expenses were $564 million, down 2.2% year over year. Selling, general and administrative (SG&A) expenses increased 9.3% year over year to $306 million. As a percentage of revenues, R&D expenses contracted 50 basis points (bps) year over year to 18%, while SG&A expenses expanded 80 bps year over year to 9.8%.
The non-GAAP operating margin of 34.5% for the reported quarter contracted 30 bps from the prior-year period.
Balance Sheet & Cash Flow
As of Mar 31, 2024, the cash and cash equivalent, and short-term deposits balance was $3.3 billion, down from $4.27 billion as of Dec 31, 2023.
The long-term debt was $10.178 billion at the end of the quarter under review compared with $10.175 billion at the end of the last reported quarter.
NXPI generated a cash flow of $851 million in the first quarter of 2024, down from $1.14 billion in the previous quarter.
The company’s capex investment was $224 million in the reported quarter. NXPI generated a free cash flow of $627 million in the quarter.
During the first quarter, the company made dividend payments of $261 million and repurchased shares worth $303 million.
Guidance
For second-quarter 2024, NXP Semiconductors expects revenues of $3.025-$3.225 billion, indicating a year-over-year fall of 5% at the mid-point.
It expects the non-GAAP gross margin between 58% and 59%. The non-GAAP operating margin is anticipated between 33.1% and 35%.
The company anticipates non-GAAP earnings of $3.00-$3.41 per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, NXP has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, NXP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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NXP (NXPI) Up 9.2% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for NXP Semiconductors (NXPI - Free Report) . Shares have added about 9.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is NXP due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
NXP Semiconductors Q1 Earnings Beat Estimates
NXP Semiconductors delivered first-quarter 2024 non-GAAP earnings of $3.24 per share, which outpaced the Zacks Consensus Estimate by 1.9%. The figure increased 1.6% year over year.
Revenues of $3.13 billion missed the Zacks Consensus Estimate by 0.02%. The figure rose 0.2% from the year-ago level.
Strong momentum across the Industrial & IoT, and Mobile end markets contributed well.
However, the company witnessed sluggishness in the Automotive, and Communication Infrastructure & Others markets.
End-Market Detail
Automotive generated $1.804 billion in revenues (58% of the total revenues), reflecting a year-over-year decrease of 1%. The figure surpassed the Zacks Consensus Estimate of $1.803 billion.
Revenues from Industrial & IoT were $574 million (18% of the total revenues), up 14% from the prior-year quarter. The reported figure lagged the consensus mark of $582 million.
Revenues from Mobile were $349 million (11% of the total revenues), up 34% from the year-ago period. The figure beat the Zacks Consensus Estimate of $344 million.
Communication Infrastructure & Others generated $399 million in revenues (13% of the total revenues), down 25% year over year. The reported figure was in line with the consensus mark.
Operating Results
The non-GAAP gross margin was 58.2%, which was flat year over year.
Research and development (R&D) expenses were $564 million, down 2.2% year over year. Selling, general and administrative (SG&A) expenses increased 9.3% year over year to $306 million. As a percentage of revenues, R&D expenses contracted 50 basis points (bps) year over year to 18%, while SG&A expenses expanded 80 bps year over year to 9.8%.
The non-GAAP operating margin of 34.5% for the reported quarter contracted 30 bps from the prior-year period.
Balance Sheet & Cash Flow
As of Mar 31, 2024, the cash and cash equivalent, and short-term deposits balance was $3.3 billion, down from $4.27 billion as of Dec 31, 2023.
The long-term debt was $10.178 billion at the end of the quarter under review compared with $10.175 billion at the end of the last reported quarter.
NXPI generated a cash flow of $851 million in the first quarter of 2024, down from $1.14 billion in the previous quarter.
The company’s capex investment was $224 million in the reported quarter. NXPI generated a free cash flow of $627 million in the quarter.
During the first quarter, the company made dividend payments of $261 million and repurchased shares worth $303 million.
Guidance
For second-quarter 2024, NXP Semiconductors expects revenues of $3.025-$3.225 billion, indicating a year-over-year fall of 5% at the mid-point.
It expects the non-GAAP gross margin between 58% and 59%. The non-GAAP operating margin is anticipated between 33.1% and 35%.
The company anticipates non-GAAP earnings of $3.00-$3.41 per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, NXP has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, NXP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.