NXP Semiconductors NV (NXPI) Reports Third Quarter 2015 Results

NXP Semiconductors NV (NASDAQ:NXPI) reported financial results for the third quarter ended October 4, 2015, as well as provided limited guidance for the fourth quarter of 2015.

“Our profitability in the third quarter of 2015 was very strong, as NXP delivered total revenue of $1.52 billion and non-GAAP operating margin of nearly 30 percent.  Revenue was approximately flat versus the same period in the prior year, and increased about one percent from the prior quarter, but below the lower end of our guidance.  In spite of slightly weaker revenue trends, non-GAAP diluted earnings per share were $1.57, above the high-end of guidance, as a result of better gross margin and expense control resulting in improved profit fall-through. Additionally we generated $266 million non-GAAP free cash flow,” said Richard Clemmer, NXP Chief Executive Officer.

“As we entered the third quarter, we noted a weakening of demand as our customers began to communicate concerns with an uncertain economic environment.  As the third quarter progressed, our end-customers, across multiple end-markets continued to voice an increased and significant degree of uncertainty around any increase in demand.  This has resulted in lower than planned sell-through and an increase of channel inventory.  As a result, our guidance for the fourth quarter reflects a much more cautious view of near term sales which may occur during the quarter.

“Notwithstanding the current business trends, we continue to make significant progress with the previously announced merger between NXP and Freescale Semiconductor, which we continue to believe will represent a transformation of NXP.  The overall regulatory approval process is progressing as anticipated and we believe we are on track to close the transaction in the fourth quarter of 2015.  We continue to make very good progress on the integration planning of the two companies.  We believe the merger of the two companies will drive significant cost synergies and broaden our product platform which will provide a significant catalyst for customer and shareholder value creation,” said Clemmer. (Original Source)

Shares of NXP Semiconductors closed yesterday at $90.92. NXPI has a 1-year high of $114 and a 1-year low of $63.52. The stock’s 50-day moving average is $88.94 and its 200-day moving average is $95.17.

On the ratings front, NXP Semiconductors has been the subject of a number of recent research reports. In a report released yesterday, Pacific Crest analyst John Vinh maintained a Buy rating on NXPI, with a price target of $125, which represents a potential upside of 37.5% from where the stock is currently trading. Separately, on October 9, Deutsche Bank’s Ross Seymore maintained a Buy rating on the stock and has a price target of $120.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, John Vinh and Ross Seymore have a total average return of 3.9% and 23.9% respectively. Vinh has a success rate of 38.6% and is ranked #1286 out of 3808 analysts, while Seymore has a success rate of 77.8% and is ranked #13.

Overall, 6 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $128.33 which is 41.1% above where the stock closed yesterday.

NXP Semiconductors NV is a semiconductor company providing High Performance Mixed Signal & Standard Product solutions. Its solutions are used for automotive, identification, wireless infrastructure, industrial, mobile, consumer & computing applications.

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