NXP (NXPI) Q3 Earnings Surpass Estimates, Revenues Miss
NXP Semiconductors N.V. NXPI reported third-quarter 2020 non-GAAP earnings of $1.70 per share, which outpaced the Zacks Consensus Estimate of $1.59. The figure decreased 29.7% year over year but increased 142.9% sequentially.
Net sales of $2.27 billion missed the Zacks Consensus Estimate by 0.01%. The figure was up 0.1% from the year-ago period and 25% on a sequential basis.
Let’s delve deeper into the numbers.
NXP Semiconductors N.V. Price, Consensus and EPS Surprise
Segments in Detail
Automotive generated $964 million sales (contributing 43% to its net sales), which reflects an increase of 43% sequentially but 8% year-over-year decrease.
Sales from Industrial & IoT came in at $514 million (23% of net sales), up 18% sequentially and 21% from the prior-year quarter.
Sales from Mobile came in at $337 million (15% of net sales), up 32% sequentially and 5% from the year-ago level.
Communication Infrastructure & Others generated $452 million sales (which contributed 19% to its net sales), flat year over year but down 4% sequentially.
Non-GAAP gross margin was 50.1%, down 360 basis points (bps) from the year-ago quarter but up 100 bps sequentially.
Operating expenses were $641 million, 2.7% higher than the year-ago quarter.
Non-GAAP operating margin of 25.8% for the reported quarter contracted 450 bps from the prior-year period but expanded 510 bps sequentially.
Balance Sheet & Cash Flow
At third quarter-end, cash and cash equivalent balance were $3.6 billion compared with $3.3 billion in the prior quarter.
Inventories were $1.1 billion versus $1.2 billion in the prior quarter. Accounts receivables increased to $755 million from $481 million in the prior quarter.
During the third quarter, NXP returned $117 million to shareholders, primarily through previously announced dividend payments.
NXP generated cash flow of $527 million, up from $414 million in the second quarter.
For fourth quarter, NXP projects revenues to be $2.45 billion, reflecting an increase of 8% sequentially and 6% year over year. The Zacks Consensus Estimate for the same is pegged at $2.26 billion.
Non-GAAP gross margin is projected at 52.7% and non-GAAP operating margin is expected to be 29.7%.
Zacks Rank & Other Stocks to Consider
Currently, NXP has a Zacks Rank #2 (Buy). Other top-ranked stocks in the broader technology sector include ON Semiconductor Corporation ON, Silicon Laboratories, Inc. SLAB and Alibaba Group Holding Limited BABA, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth for ON Semiconductor, Silicon Laboratories, and Alibaba is currently projected at 1.3%, 15% and 19.4%, respectively.
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