NXP Gives Downbeat Sales Forecast, Saying Demand Hasn’t Improved

30 Jul 2019, 11:42 AM IST

(Bloomberg) -- NXP Semiconductors NV gave a third-quarter forecast that fell short of analysts’ projections, citing a persistent slowdown in demand.

The biggest supplier of chips to the automotive industry foresees third-quarter revenue of $2.21 billion to $2.27 billion. Analysts on average expected $2.35 billion, according to data compiled by Bloomberg.

Key Insights

Second-quarter revenue fell 3% year-on-year to $2.22 billion, the Eindhoven, Netherlands-based semiconductor supplier said late Monday in a statement. That was slightly higher than the average analyst prediction of $2.2 billion.
“In the short-term, the global demand environment has generally not improved,” Chief Executive Officer Rick Clemmer said in the statement.
Earnings per share in the recent quarter fell to 14 cents from 16 cents a year earlier.
Margins and cost cuts as well as an expanded buyback are likely to be helping NXP’s near-term EPS, Bloomberg Intelligence analyst Anand Srinivasan said ahead of the release. Still, “Key volatility drivers remain China macroeconomics, tariffs and the impact of Huawei,” he said.

Know More

In May, NXP announced the purchase of Marvell Technology Group Ltd.’s Wi-Fi and Bluetooth technology and related assets, in a deal valued at $1.76 billion. The Dutch company said the acquisition would allow it to offer customers a broader range of options to connect devices to the web. The deal is due to close by the first quarter of 2020.
Chipmakers face uncertainty over their ability to continue supplying Huawei Technologies Co. after the U.S. announced in May it would place the Chinese telecom equipment giant on an “entity list” - meaning any U.S. company needs a special license to sell it products.
While NXP is based in the Netherlands, it has design, research and development, manufacturing and sales operations in the U.S. and receives 1.6% of its sales from Huawei, according to data compiled by Bloomberg.

To contact the reporters on this story: Ellen Proper in Amsterdam at eproper@bloomberg.net;Natalia Drozdiak in Brussels at ndrozdiak1@bloomberg.net

To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Jillian Ward, Andrew Pollack