NXP shares fall 7% after hours despite 19% third-quarter revenue growth
Key Facts
NXP Semiconductors shares fell 7% in after-hours trading on Tuesday, October 27, after the company reported third-quarter results and issued fourth-quarter guidance, according to a Reuters report published via Investing.com. The reaction followed quarterly revenue of $3.786 billion, up 19% year over year and 8% from the previous quarter, according to its results statement published via Nasdaq. The stock closed the regular session at $253.50, according to EL7 data. The after-hours decline reflects investors’ response to the new guidance, while quarterly results showed revenue growth. The comparison centered on the revenue outlook, with the midpoint of the company’s range just below analysts’ consensus.
NXP set fourth-quarter revenue guidance at $3.75 billion to $3.95 billion, with a midpoint of $3.85 billion, according to its statement. Reuters compared the range with analysts’ consensus of $3.86 billion, meaning the company’s midpoint is $0.01 billion below consensus. The guidance range also implies year-over-year growth of 12% to 18%, with growth of 15% at the midpoint, according to the statement. The figures put the company’s outlook near market estimates, although the midpoint of the revenue range is slightly lower. By contrast, adjusted earnings-per-share guidance was above consensus at the midpoint.
The company forecast adjusted earnings per share of $4.14 to $4.58 for the fourth quarter, with a midpoint of $4.36, versus analysts’ consensus of $4.34, according to Reuters. That means the guidance midpoint exceeded consensus by $0.02 per share, despite the slight gap in fourth-quarter revenue. NXP’s statement presents the same range as non-GAAP diluted earnings per share, setting the low end at $4.14, the midpoint at $4.36 and the high end at $4.58. Reuters said the outlook sent the stock down 7% after hours on Tuesday. The move followed a regular session in which the stock rose 3.12%, before falling 7.6% to $234.25 in after-hours trading, according to Investing.com’s report on the results.
Automotive was NXP’s largest business in the third quarter, generating revenue of $2.070 billion, compared with $1.837 billion in the same period a year earlier, a 13% year-over-year increase, according to the company’s statement. Automotive revenue accounted for more than half of total quarterly revenue of $3.786 billion. Year over year, the segment’s growth was below the company’s overall revenue growth of 19%, while NXP’s total revenue rose 8% from the previous quarter. The figures show that automotive remained the largest revenue driver, while growth rates varied across the company’s businesses. Annual growth was not limited to automotive, as industrial and Internet of Things grew faster.
Revenue in the industrial and Internet of Things segment rose 39% year over year to $802 million in the third quarter, compared with $579 million a year earlier, according to NXP’s statement. By contrast, mobile revenue fell 4% year over year to $411 million, from $430 million in the same period a year earlier. Industrial and Internet of Things therefore recorded the fastest annual growth among the businesses listed in the results, while mobile revenue declined year over year. These differences put automotive growth of 13% between faster growth in the industrial segment and a decline in mobile. For the fourth quarter, the company expects total revenue to continue growing year over year within a range of 12% to 18%.
ON Semiconductor shares closed at $78.67 on October 27, after closing at $74.06 in the previous session, according to EL7 data. Comparing the two closes shows the price rose between sessions and does not support the earlier draft’s claim that the stock fell 5% on October 27. The supplied data do not include verified closing prices for Qualcomm or Texas Instruments on that day, so the article does not report their prices. The available market-movement data here are limited to NXP’s regular-session close and ON Semiconductor’s closes on two consecutive days, alongside NXP’s reaction after the results announcement. As a result, the market reaction indicators tied to the report remain focused on NXP shares and its quarterly outlook.