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NXP soars after results, guidance better than feared

  • NXP's (NXPI +10.1%) Q3 results are mixed, and so is its Q4 guidance: while the midpoint of NXP's EPS guidance range of $0.85-$1.02 is above a $0.92 consensus, the midpoint of a revenue guidance range of $1.189B-$1.256B is below a $1.23B consensus. But with investors expecting bad Q4 guidance from chip stocks, the reaction to NXP's numbers has been quite positive.
  • Likely pleasing the Street: NXP expects its gross margin to rise to 49%-50% in Q4 from 47.8% in Q3, which itself was up 60 bps Q/Q. The chipmaker's Q3 EPS was boosted by $159M in buybacks, as well as by controlling spending: opex only rose 3% Y/Y, less than rev. growth of 7%.
  • NXP's Automotive chip sales rose 9% Y/Y after dropping 3% in Q2. Identification chip sales (inc. NFC chips) remained strong, rising 20% in Q3 vs. 21% in Q2. Industrial/Infrastructure sales saw a big turnaround, +18% vs. -7%. Portable/computing +9% vs. +1%, mixed signal chips +15% vs. +3%. Only standard product (analog chip) sales remain weak, falling 8% in Q3 after dropping 11% in Q2.
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