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NXP (NXPI) Q4 Earnings & Revenues Surpass Estimates, Up Y/Y

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Zacks Equity Research
·3 min read
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NXP Semiconductors N.V. NXPI reported fourth-quarter 2020 non-GAAP earnings of $2.68 per share, which outpaced the Zacks Consensus Estimate of $2.11. The figure increased 11.2% year over year and 57.6% sequentially.

Net sales of $2.51 billion surpassed the Zacks Consensus Estimate by 1.7%. The figure was up 9% from the year-ago period and 11% on a sequential basis.

Let’s delve deeper into the numbers.

NXP Semiconductors N.V. Price, Consensus and EPS Surprise

NXP Semiconductors N.V. Price, Consensus and EPS Surprise
NXP Semiconductors N.V. Price, Consensus and EPS Surprise

NXP Semiconductors N.V. price-consensus-eps-surprise-chart | NXP Semiconductors N.V. Quote

Segments in Detail

Automotive generated $1.2 billion sales (contributing 48% to its net sales), which reflects an increase of 24% sequentially and 9% year over year.

Sales from Industrial & IoT came in at $511 million (20% of net sales), down 1% sequentially but up 23% from the prior-year quarter.

Sales from Mobile came in at $409 million (16% of net sales), up 21% sequentially and 23% from the year-ago level.

Communication Infrastructure & Others generated $394 million sales (which contributed 16% to its net sales), down 13% sequentially and 14% year over year.

Operating Results

Non-GAAP gross margin was 52.9%, down 130 basis points (bps) from the year-ago quarter but up 280 bps sequentially.

Operating expenses were $829 million, 18.2% lower than the year-ago quarter.

Non-GAAP operating margin of 30.5% for the reported quarter expanded 470 bps from the prior-year period and 60 bps sequentially.

Balance Sheet & Cash Flow

At fourth quarter-end, cash and cash equivalent balance were $2.3 billion compared with $3.6 billion in the prior quarter.

Inventories were $1 billion versus $1.1 billion in the third quarter. Accounts receivables increased to $765 million from $755 million in the third quarter.

Long-term debt was $7.6 billion for the reported quarter.

During the fourth quarter, NXP returned $105 million to shareholders, primarily through previously announced dividend payments.

NXP generated cash flow of $1.03 billion, up from $527 million in the third quarter. Capital expenditure was $103 million versus $68 million in the prior quarter.

Guidance

For the first quarter, NXP projects revenues to be $2.55 billion, indicating an increase of 2% sequentially and 26% year over year. The Zacks Consensus Estimate for the same is pegged at $2.47 billion.

Non-GAAP gross margin is projected at 53.5% and non-GAAP operating margin is expected to be 30.4%.

Zacks Rank & Stocks to Consider

Currently, NXP has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Semtech Corporation SMTC, Overstock.com, Inc. OSTK and Microchip Technology Incorporated MCHP, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth for Semtech, Overstock.com, and Microchip Technology is currently projected at 12.5%, 20% and 14.9%, respectively.

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