Analysts Remain Bullish On NXP Semiconductors Despite Mixed Guidance

NXP Semiconductors NV NXPI Monday reported its third-quarter results and announced guidance for the fourth quarter.

The Results

NXP Semiconductors’ quarterly results were strong, with revenue of $2.27 billion beating the consensus estimate of $2.24 billion. The company also delivered an earnings beat, reporting $2.02 per share versus expectations of $1.93 per share.

KeyBanc Capital Markets analyst John Vinh mentioned that the results were higher than their estimates of $2.25 billion and $1.96 per share, respectively. He added that gross margin of 53.7% was in-line with their estimate of 53.7%, although this was slightly lower than the consensus estimate of 53.8%.

Earlier this month, Vinh had upgraded the rating on NXP Semiconductors from Sector Weight to Overweight.

The third-quarter earnings beat was driven by mobile strength, while industrials were slightly above Street expectations, analyst Vivek Arya of Bank of America said in a note. He added that the performance of communications infrastructure was disappointing and that of auto was in-line with Street expectations.

Arya maintained a Buy rating on the stock, with an unchanged price target of $125.

The Guidance

Although fourth-quarter revenue guidance of $2.27 billion at the midpoint came in-line with the consensus, it missed KeyBanc’s estimate of $2.33 billion, Vinh said.

The gross margin and earnings guidance of 54.2% and $2.00 per share were lower than the consensus estimates of 54.4% and $2.08 per share, respectively.

The fourth-quarter guidance met expectations, despite uncertainties in the global demand environment, Arya noted.

Price Action

Shares of NXP Semiconductorswere up 8.38% to $117.75 at the time of publishing on Tuesday.