NXP Semiconductors offered guidance for the fourth-quarter that indicates it expects meaningful sequential and annual growth in the period. CEO Kurt Sievers said his company has a positive outlook for the holiday season thanks to rising demand for its core products.
The Dutch chipmaker also revealed detailed third-quarter financial results, which showed significant improvements in its automotive, industrial Internet of Things (IoT), and mobile income.
NXP’s Robust Q4 Forecast
For the current period, NXP anticipates generating between $2.37 billion and $2.52 billion in revenue. That means the company predicts it will beat its intake from the same period in 2019 by 3.21 to 9.73 percent. It also provided an operating income range of $425 million to $499 million. Depending on its final results, the semiconductor maker anticipates improving that metric by 115.7 to 153.2 percent year-over-year.
Sievers said the momentum NXP picked up in Q3 would carry forward into the current quarter. The executive noted the firm’s business had entered a recovery phase because its end-markets have bounced back from the coronavirus pandemic’s impact. For that reason, the company anticipates brisk sales of its vehicle, IIoT, and smartphone components this quarter.
Based on recent market data, the manufacturer’s forecast seems entirely justified.
NXP counts Apple as one of its largest clients, so the electronic maker’s recent release of the iPhone 12 series should bolster its Q4 income. Earlier this month, analysts noted the new handsets saw stronger than anticipated demand, which will drive revenue for its suppliers.
In addition, Xilinx and STMicroelectronics, which specialize in automotive semiconductors, experienced spiking sales of their core offerings in Q3. Those results suggest the global vehicle market is shaking off the economic effects of COVID-19.
If demand in those segments remains consistent, NXP could meet its Q4 guidance and produce strong financial results in Q1 2020.
NXP Q3 Performance
The Dutch semiconductor manufacturer revealed it outpaced its own Q3 gross income outlook in early October. But the chipmaker’s detailed financial results showed the extent of its near-term recovery.
NXP made $2.267 billion in the September period, even with last year but up 25 percent from Q2. The firm improved its operating income by 122 percent quarter-over-quarter and beat Wall Street’s expectations on its earnings per share.
It also recorded significant sales increases in each of its core segments. The company’s IIoT, mobile, and automotive intake rose by 18, 32, and 43 percent sequentially last period. The manufacturer also saw a 21 percent annual jump in revenue for its connected components unit.
After two consecutive quarters of coronavirus weakened financial results, NXP returned to growth in Q3. Its surging business and optimistic outlook indicate the chipmaker has put the worst behind it.