NXP Announces Preliminary First Quarter 2010 Results
NXP Semiconductors announced first quarter total sales of USD $1,165 million, a comparable year on year increase of 69.7% (nominal 66.0%) and a comparable sequential increase of 6.7% (nominal 0.3%). Comparable year on year sales growth in the High Performance Mixed Signal business segment was 82.5% and 81.6% in the Standard Products business segment. Sales continued to improve across each business segment and region.
Income (loss) from Operations (IFO) in the first quarter of 2010 was nil compared with a loss of $347 million in the same period of 2009. This improvement is mainly attributable to the market share gains driven by design wins across a wide range of its business lines, its responsive manufacturing operations and the economic recovery. The IFO in the first quarter of 2010 also improved against a loss of $205 million in the fourth quarter of 2009 largely due to a higher gross profit supported by lower operating expenses. The company achieved a gross profit of $428 million, or 36.7% of sales, compared with $68 million, or 9.7% of sales, in the first quarter of 2009, and $393 million, or 33.9% of sales, in the fourth quarter of 2009. The year on year increase in gross profit in the first quarter of 2010 was largely due to higher sales supported by cost reductions, which we achieved as a result of the ongoing Redesign Program.
NXP’s cash position at the end of the first quarter of 2010 was $870 million compared with $1,706 million at the end of the same period last year and $1,041 million at the end of the fourth quarter of 2009. The difference in cash position between the end of the first quarter of 2010 and the end of the fourth quarter 2009 is mainly explained by the cash spent on the Redesign Program of $86 million and the cash amount of USD 47 million paid to Trident upon completion of the transaction on February 8, 2010.
The Redesign Program is ahead of schedule and management believes that we have achieved approximately $650 million of annual savings as per March 31, 2010, as compared to its annualized third quarter results for 2008. The closure of parts of its front-end manufacturing facility in Hamburg, Germany, as announced earlier, took place in the first quarter of 2010.
Effective January 1, 2010, NXP has decided to regroup its reportable business segments reflecting the decision to build leadership in High Performance Mixed Signal technology while maintaining a strong position in Standard Products.