NXP Semiconductors Falls After ‘Worse-Than-Feared’ Forecast

(Bloomberg) -- NXP Semiconductors fell 5.9% in pre-market trading after its first-quarter forecast missed consensus as a result of macro headwinds from China. Deutsche Bank said it was “worse-than-feared.”

Now all eyes are on the 8 a.m. conference call, after which Stifel, a bear on the stock, expects to lower estimates.

Here’s what Wall Street is saying:

Deutsche Bank, Ross Seymore

The upside of fourth-quarter results were more than offset by a “worse-than-feared” first-quarter outlook. Even though the co was affected by China macro headwinds like its peers, the magnitude of the -13% quarter-over-quarter revenue guidance was larger than anticipated, Seymore said, adding that he’ll be looking for management commentary on the duration of the current weakness during the conference call.

SunTrust, William Stein

Cost savings and share buybacks will preserve earnings per share in the medium-term after the company provided a below-consensus sales outlook for the second time as it faces weakened auto and industrial demand in China along with its peers.

Rates buy, PT $99

Stifel, Tore Svanberg

Expects to revise estimates lower as weakening demand in automotive and industrial units in China weighed on the company’s outlook. Also adding into the bearish outlook is that net debt increased $153 million to $4.6 billion as the cost of debt increased 100 basis points, plus and trailing 12 month free cash flow fell 2.7 percent quarter-over-quarter.

Rates sell, PT $ $78

Bernstein, Stacy Rasgon

“We were not terribly surprised by the revenue guide,” as it was in-line with peers and investors were expecting a downside. On the call, management should dig into gross margins, Rasgon said, adding that he’d like to see the company reiterate its forecast for the metric.

Mizuho analyst Vijay Rakesh

There are significant challenges in the near-term with macro headwinds from China and Europe, but long-term, advanced driver assistance systems and mobility remain one of the most vibrant markets with growth from global mandates.

Also said that strong share repurchases would continue into the first quarter following $5 billion in buybacks from 2018.

Rates buy, PT $95

To contact the reporter on this story: Natasha Rausch in New York at nrausch@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Will Daley

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