News

Performance Better than Planned at NXP

October 23, 2014 by Jeff Shepard

NXP Semiconductors N.V. reported financial results for the third quarter of 2014, ended September 28, 2014, and provided guidance for the fourth quarter of 2014. The company also reported the realignment of its high-performance mixed-signal (HPMS) product group. "Our top-line results for the third quarter of 2014 were above the mid-point of our guidance, as total NXP revenue in the quarter was $1,515 million, a 12 percent sequential improvement, and a 21 percent increase year-on-year. Our third quarter results were a direct reflection of strong HPMS product cycles across the entire product portfolio," said Richard Clemmer, NXP Chief Executive Officer.

“Revenue performance in the HPMS segment was better than planned, resulting in a 15 percent sequential increase and 24 percent year-on-year growth. Within Portable & Computing, our results were very strong and above our expectations, reflecting a 48 percent improvement versus the second quarter, and up 67 percent from the year ago period as strategic mobile designs continue to gain traction in successful new models. Our Identification business grew 15 percent from the prior quarter, and up 20 percent from the year ago period driven primarily by mobile transaction designs within the smartphone market, as well as on-going demand for banking solutions.

“Within our Industrial & Infrastructure business, revenue performance in the quarter was slightly better than our original plan, resulting in 13 percent growth sequentially, and up 18 percent from the year ago period, due to continued strength in the wireless base station market as well as demand for our smart mobile audio products. Our Automotive business delivered better than seasonal performance with revenue flat on a sequential basis, though up 10 percent from the year ago period. Lastly, our Standard Products segment continues to perform well, with revenue up 5 percent sequentially and up 14 percent versus the year ago period.

As of January 1, 2015 NXP will implement a new business structure within its HPMS segment. The new business structure will affect the HPMS business lines Identification (“ID”); Portable & Computing (“P&C”) and Infrastructure & Industrial (“I&I”). The new HPMS business lines will be designated Secure Identification Solutions (“SIS”); Secure Connected Devices (“SCD”) and Secure Interfaces and Power (“SIP”). There will be no change to the HPMS business line Automotive (“Auto”).

“During the third quarter, non-GAAP diluted earnings per share were $1.35, at the high-end of guidance primarily due to better product revenue growth. NXP generated $316 million in free cash flow during the quarter, representing 21 percent free cash flow margin. We repurchased an additional 8.7 million shares during the quarter for a total of $574 million continuing to return cash to shareholders. In summary, our third quarter performance was very strong, with revenue better than plan, expenses under control and earnings at the high end of expectations. Our outlook for the fourth quarter points to a slightly better than seasonal trend as company specific product cycles continue to ramp against a backdrop of a slightly less optimistic overall semiconductor market,” said Clemmer.