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NXP Semiconductors NV (NASDAQ:NXPI) Shares Bolt Higher on Another Positive in the Chip Space for Q3-Q4

NXP Semiconductors NV (NASDAQ:NXPI) stepped up to the plate to offer another perspective on the continuing dilemma for the market about where we are in the process of the chip cycle. The company reported financial results for the third quarter 2018 ended September 30, 2018, and results were far more in the vein of INTC and XLNX than AMD and TXN. In other words, they were strong, and the stock took flight.

“NXP delivered strong results for the third quarter of 2018, with revenue at $2.45 billion, an increase of 2 percent year-on-year, an increase of 7 percent versus the prior quarter and $20 million above the mid-point of our guidance. HPMS segment revenue was $2.35 billion, an increase of 3 percent year-on-year, and an increase of 7 percent from the prior quarter,” said Richard Clemmer, NXP Chief Executive Officer.

NXP Semiconductors NV (NASDAQ:NXPI) trumpets itself as a semiconductor company that provides high performance mixed signal solutions for radio frequency (RF), analog, power management, interface, security, and digital processing products worldwide.

The company offers products for audio and visual head-end unit applications, such as single-chip radio solutions, multi-standard radios, audio amplifiers and power analog products, and i.MX applications processors; in-vehicle networking products; two-way secure entry products; various sensors and microcontrollers; power management solutions; and solutions for radar, vision, vehicle-to-vehicle, and vehicle-to-infrastructure systems.

It also provides secure identification solutions, such as passive RF connectivity devices; microcontroller devices; and secure real-time operating system software products to facilitate the encryption-decryption of data, and the interaction with the reader infrastructure systems.

In addition, the company delivers semiconductor-based technologies for connected devices comprising microcontrollers, secure mobile transaction solutions, and various connectivity solutions; and offers digital networking processors, secure interface and system management products, high-performance RF power-amplifiers, and smart antennae solutions.

Its product solutions are used in a range of application areas, including automotive, identification, wireless infrastructure, lighting, industrial, mobile, consumer, computing, and software solutions for mobile phones. The company markets its products to various original equipment manufacturers, original design manufacturers, contract manufacturers, and distributors.

NXP Semiconductors N.V. has a partnership with Hitachi Solutions, Ltd. to develop V2X modem and processors. The company was formerly known as KASLION Acquisition B.V and changed its name to NXP Semiconductors N.V. in May 2010.


Reaction Action

We started off by noting that NXPI just hit the wires with the announcement of its financial results for the third quarter 2018 ended September 30, 2018.

Note that these results hit a tape that has been beaten down following the drama of the failed take-over by QCOM, a deal that was thwarted by Chinese regulators as a chess piece in the US-China trade war that still plagues the financial and mainstream news in front of the midterm elections next week.

The stock is up on the news. Overall, shares of NXPI have rallied about 14% over the past week. That sets up an interesting context for the action tomorrow.

“Within Automotive, third quarter revenue was $990 million, up 4 percent year-on-year, with advanced analog and infotainment primarily contributing to the year-on-year growth, while reduced pulls of automotive MCUs from tier-one customers impacted the overall year-on-year growth. Within Secure Connected Devices, third quarter revenue was $717 million, up 1 percent year-on-year driven by the continued demand for general purpose, multi-market MCUs, which were up high single digits, offset by a significant decline in demand for mobile transaction solutions after a strong new customer ramp during 2017. In Secure Interface and Infrastructure, third quarter revenue was $511 million, up 5 percent year-on-year due to early 5G network trials with North American carriers. Lastly, in Secure Identification Solutions, third quarter revenue was $133 million, down 4 percent year-on-year due to lower demand for bank card products,” said Clemmer.

NXP Semiconductors NV (NASDAQ:NXPI) managed to rope in revenues totaling $2.3B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 4%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($3B against $1.9B).

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