Thu, Jul. 30, 1:40 PM
- With many other chipmakers (including microcontroller rivals such as TI and Atmel) having already provided soft Q3 outlooks, NXP (NASDAQ:NXPI) is rallying in spite of providing light Q3 revenue guidance with its Q2 EPS beat and in-line sales. Merger partner Freescale (NYSE:FSL) is naturally along for the ride.
- Cost controls helped NXP beat Q2 EPS estimates: GAAP operating expenses fell 1% Y/Y to $393M - R&D totaled $195M and SG&A $198M. Also: $162M was spent on buybacks, and gross margin (non-GAAP) rose 20 bps Q/Q and 10 bps Y/Y to 48.7% (above guidance of 48.5%). Q3 GM guidance is at 48.5%-49%.
- iPhone NFC chip sales fueled a 39% Y/Y increase in Secure Connected Devices revenue to $276M. Apple M8 motion co-processor sales drove a 29% increase in secure interfaces/power revenue to $303M. Secure ID solutions (smart cards/EMV) revenue fell 4% to $257M, automotive rose 8% to $310M, and standard products (power management and logic ICs) rose 2% to $322M.
- Q2 results/Q3 guidance, PR
Thu, Jul. 23, 4:18 PM
Wed, Jul. 22, 5:35 PM
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Fri, May 1, 12:34 PM
- After giving back most of yesterday's initial post-earnings gains amid a market selloff, NXP (NXPI +4.3%) is up sharply today as upbeat sell-side reactions arrive. Merger partner Freescale (FSL +3.7%) is naturally following NXP higher.
- Needham's Rajvindra Gill observes that while NXP offered soft Q2 guidance (as many expected), it guided on its CC (transcript) for full-year revenue of $6.2B-$6.3B, roughly in-line with consensus and good for 11% Y/Y growth at the midpoint. He adds Q1 gross margin of 48.5% was above a 47.8% consensus, and that Q2 GM guidance of 48.5% was 40 bps above consensus.
- Gill, who launched coverage on NXP with a Strong Buy rating and $140 target in March, still sees NXP/Freescale delivering $9+ in 2017 EPS, and asserts the post-merger company will be "a powerhouse in autos, microcontrollers (MCUs), and the Internet-of-Things (IoT)."
- Separately, an ABI Research teardown of the Apple Watch's S1 chip module turned up (as expected) an NXP NFC controller IC, as well as a second NXP chip (motion co-processor?). AMS provides a complementary NFC signal booster chip.
Thu, Apr. 30, 9:40 AM
- In addition to slightly missing Q1 revenue estimates (while beating on EPS), NXP (NASDAQ:NXPI) is guiding for Q2 revenue of $1.485B-$1.535B and EPS of $1.33-$1.43, mostly below a consensus of $1.54B and $1.41. However, a soft outlook was expected after many peers provided one last week.
- With Apple NFC chip and M8 motion co-processor demand still providing a boost, high-performance mixed-signal chip sales (75% of total revenue) rose 21% Y/Y in Q1 to $1.1B. Standard products (analog/power management chips) rose 9% to $323M.
- Boosting Q1 EPS, gross margin (non-GAAP) was 48.5%, +190 bps Q/Q and -100 bps Y/Y, and slightly above guidance of 48%; Q2 GM guidance is at 48.5%. Also: GAAP operating expenses only rose 2% Y/Y to $409M; R&D spend rose by $10M to $199M, but SG&A fell by $3M to $210M.
- Merger partner Freescale (NYSE:FSL) is following NXP higher. Freescale posted a Q1 beat and soft guidance last week.
- Q1 results, PR
Fri, Apr. 24, 2:03 PM
- Though the Nasdaq is up 0.7% thanks to market-pleasing earnings from Google, Microsoft, and Amazon, chip stocks (SOXX -2.1%) are adding to their Thursday losses after Freescale, Altera, Microsemi, and Maxim joined the ranks of chipmakers offering soft Q2 guidance; Texas Instruments, Xilinx, and Qualcomm did so on Wednesday afternoon.
- NXP (NXPI -4.3%), set to merge with Freescale in a cash/stock deal, is selling off ahead of its April 29 Q1 report. RF chipmakers Skyworks (SWKS -3.8%), Qorvo (QRVO -4.4%), and Avago (AVGO -5.2%) are also seeing steep declines.
- Other decliners include a slew of telecom/networking, microcontroller, and analog/mixed-signal chipmakers. The group includes Marvell (MRVL -3%), ON Semi (ON -6.9%), Atmel (ATML -3.3%), Cypress (CY -4%), Lattice (LSCC -3.9%), Semtech (SMTC -6.9%), Cavium (CAVM -6%), PMC-Sierra (PMCS -2.9%), InPhi (IPHI -3.8%), and Silicon Labs (SLAB -2.9%). Chip packaging/testing firm Amkor (AMKR -5.7%) is also off; its Q1 report arrives on Monday.
- As was the case with TI and Xilinx, soft telecom equipment chip demand was often blamed by those guiding light yesterday afternoon. Freescale (FSL -3.5%) stated it expects network processor division sales to be down Q/Q and RF (base station power amplifier) division sales to be flat. Microcontroller, automotive, and analog and sensor division sales are expected to rise.
- Altera (ALTR -3.3%) stated its "telecom and wireless business, and particularly our wireless business globally looks to be quite weak in [Q2], while the rest for our business will in aggregate be flat to slightly up." Regarding its Q1 miss, the company notes "Industrial, test, compute and storage, and to a lesser extent military, fell short of our forecast" (share loss to Xilinx?).
- Maxim reports seeing "broad-based softness in communications infrastructure demand" and soft industrial bookings to go with healthier mobile/auto demand. The Galaxy S6 appears to be giving a lift to Maxim's mobile sales.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Thu, Apr. 23, 6:25 PM
- Though it beat Q1 estimates, Freescale (NYSE:FSL) has guided for Q2 revenue of $1.155B-$1.205B, below a $1.22B consensus.
- No explanation is given for the outlook in the earnings release. Texas Instruments and Xilinx have both observed seeing soft demand from the mobile infrastructure market, which Freescale is well-exposed to. Freescale's RF sales (inc. mobile power amplifiers) rose 63% Y/Y in Q1 to $184M.
- Shares have fallen to $38.99 AH; they were down 3.7% in regular trading thanks to TI/Xilinx's numbers. NXP, which is set to buy Freescale in a cash/stock deal, is nearly unchanged for now.
- Q1 results, PR
Thu, Apr. 23, 4:07 PM
Wed, Apr. 22, 5:35 PM
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Tue, Jan. 27, 5:20 PM
- In addition to beating Q4 EPS estimates (while posting in-line revenue), Freescale (NYSE:FSL) is guiding for Q1 revenue of $1.135B-$1.185B, above a $1.11B consensus.
- Driving the EPS beat: Q4 gross margin was 47.2%, up 90 bps Q/Q and 330 bps Y/Y, and soundly beating guidance for a 75-100 bps Q/Q drop. GM is expected to be roughly flat Q/Q in Q1.
- RF chip sales (lifted by Chinese 4G base station demand) were a standout in Q4, rising 71% to $164M. Microcontroller sales +5% Y/Y to $232M. Digital networking -11% to $217M (carrier and industrial weakness). Automotive MCUs +1% to $271M. Analog/sensors +2% to $193M.
- Operating expenses rose 4% to $327M. $74M was spent on capex in Q4, and $249M over the whole of 2014.
- Shares have risen to $29.50 AH, making new 52-week highs along the way.
- Q4 results, PR
Tue, Jan. 27, 4:07 PM
Mon, Jan. 26, 5:35 PM
Nov. 26, 2014, 2:52 PM
- Chip stocks are outperforming after Analog Devices (ADI +5.2%) beat FQ4 estimates and offered in-line FQ1 guidance. The Philadelphia Semi Index (SOXX +1.9%) has made new highs.
- Notable gainers include many analog/mixed-signal and telecom IC firms: TXN +3%. LLTC +2.7%. SMTC +3.1%. ISIL +3.3%. SWKS +3.7%. AVGO +2.9%. OVTI +3.2%. FSL +3.1%. EZCH +2.5%. XLNX +2.3%. ALTR +2.1%. MX +4.3%. PMCS +2.7%. BRCM +2%.
- On its CC (transcript), ADI noted its telecom equipment chip sales are holding up well in spite of weak capex, aided by the fact its dollar content for 4G base stations is "at least 20% to 30% better" than for 3G base stations. The company also mentioned its lead times were stable in FQ4.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Oct. 31, 2014, 11:31 AM
- Three weeks after providing a calendar Q3 warning that triggered a massive chip stock rout, Microchip (MCHP +7.3%) has provided Q4 guidance that's in-line with lowered estimates. The microcontroller vendor, which has often seen trends emerge ahead of peers, also said it saw most of its inventory correction in Q3, and expects Q4 sales to be just "slightly below typical seasonal levels."
- Chip stocks are up strongly (SOXX +4%) on a day the Nasdaq is up 1.4%. Since Microchip's warning, a slew of analog chipmakers and microcontroller firms (e.g. Atmel, Freescale, STMicro, Intersil, Linear) have offered light Q4 guidance, and other firms have reported seeing high-end Android weakness (e.g. Synaptics, Cirrus Logic, Amkor).
- On the other hand, several mobile chipmakers (Skyworks, RF Micro, TriQuint, Silicon Motion), some of which have decent iPhone exposure, have provided strong results and/or guidance. Other chipmakers, such as Broadcom, Texas Instruments, and Xilinx, have rallied after delivering in-line guidance.
- Susquehanna's Chris Caso: "By now, we think it’s clear that the weakness MCHP saw in September is not company specific ... The question now is if the full extent of the weakness has been dialed into estimates. If it has, then this would be among the shortest and mildest downturns in many years."
- Notable gainers: SNDK +3.9%. MU +4.1%. AMAT +3.9%. TXN +4.7%. NXPI +3.9%. NVDA +3.5%. MXIM +4.7%. LLTC +5.1%. FCS +9.6%. FSL +8.8%. ADI +6.5%. TQNT +6.8%. RFMD +6.5%. ATML +5.9%. AVGO +5.1%. MRVL +4.7%. AMCC +8.9%. BRCM +3.6%. TSM +4.4%. ARMH +3.3%.
- Intel (INTC +3.5%) has recovered most of the losses it saw yesterday due to Intesil's (ISIL +3.3%) results and guidance, and related comments about a PC chip inventory correction.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Oct. 24, 2014, 2:31 PM
- Down AH yesterday due to the light Q4 guidance offered with a Q3 EPS beat, Freescale (NYSE:FSL) has reversed course. Some bullish sell-side notes are helping.
- Credit Suisse's Jonathan Pitzer likes the face Freescale's gross margin rose 110 bps Q/Q in Q3 (better than guidance for a 50 bps drop), and that op. margin reached a record high of 18.7% thanks to a 3.5% Q/Q opex drop. " This should alleviate investor concerns relative to margin drivers that often seemed ambiguous."
- Deutsche's Ross Seymore: "Despite near term revenue headwind, we continue to view FSL as a company that is righting the ship on revenue, focusing on gross margin progression and opex discipline, which should result in better free cash flow to further de-lever the balance sheet and unlock earnings power."
- Oppenheimer's Rick Schafer is more cautious, calling Chinese 4G infrastructure demand "the lone bright spot" for the chipmaker's sales as it deals with auto/industrial softness.
Oct. 23, 2014, 6:25 PM
- Though it posted in-line Q3 revenue and beat EPS estimates, Freescale (NYSE:FSL) is guiding for Q4 revenue of $1.075B-$1.125B, below a $1.18B consensus. In addition, gross margin is expected to drop 75-100 bps from a Q3 level of 46.3%.
- Freescale was among the names clocked earlier this month by fellow microcontroller vendor Microchip's warning.
- Q3 results, PR
FSL vs. ETF Alternatives
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