Earnings
NXP posts record $3.79 billion quarter, but a softer fourth-quarter outlook sends shares down about 7.6% after hours
The automotive chipmaker beat third-quarter estimates and added a $5 billion buyback, but guided to sequential growth of at most 4%.
HedgeWeekly News Desk ·
NXP Semiconductors reported third-quarter revenue of $3.79 billion on Tuesday, up 19% from a year earlier and 8% from the second quarter. Adjusted earnings came to $4.20 a share, ahead of the $4.11 analysts expected, while revenue topped the $3.76 billion consensus, according to Investing.com.
Automotive, its largest market, brought in $2.07 billion, a first above $2 billion, up 13%. Industrial and IoT sales jumped 39% to $802 million and communications infrastructure rose 54% to $503 million, while mobile slipped 4% to $411 million. Adjusted gross margin was 58.6% and free cash flow was $1.21 billion. The board approved a further $5 billion buyback on top of $1.3 billion left under the existing plan.
For the fourth quarter, NXP forecast revenue of $3.75 billion to $3.95 billion, between a 1% decline and 4% growth on the third quarter, and adjusted earnings of $4.14 to $4.58 a share. The shares, which closed the regular session at $253.50, fell 7.6% to $234.25 in extended trading. Saxo described the revenue outlook as weaker than expected.
Why it matters: The after-hours drop came hours after the Philadelphia semiconductor index rose 3.6%, its best day in over a month, showing how little room investors are giving chipmakers whose next-quarter growth flattens. NXP is a bellwether for car and factory chip demand, and its guide implies sequential growth slows sharply from 8%. On the call, management said data centre revenue should beat its earlier $500 million view for 2026 and top $1 billion by 2028. Investors will watch whether that AI-linked line can offset a cooling automotive cycle, and how the expanded buyback is deployed, as the Fed decision and megacap results land on Wednesday.