In a good sign for the mobile or networking chip industry, mid cap semiconductor stock NXP Semiconductors NV (NASDAQ: NXPI) just beat Wall Street expectations – meaning it might be a good time to take a closer look at the stock and its recent earnings report to see whether it’s a good time to get in or to get back into semiconductor stocks.
What is NXP Semiconductors NV?
Based in the Netherlands and formerly a division of Philips that was known as Philips Semiconductors, NXP Semiconductors NV is a semiconductor holding company whose product solutions are used in a range of automotive, identification, wireless infrastructure, lighting, industrial, mobile, consumer and computing applications. NXP Semiconductors NV has approximately 10,000 issued and pending patents; research and development activities in Asia, Europe, and the United States; and manufacturing facilities (including 6 wafer fab facilities and 6 test and assembly sites) in Asia and Europe.
What You Need to Know About NXP Semiconductors NV and Its Recent Earnings Report
On Monday, NXP Semiconductors NV reported revenue results which came in at the higher end of the company’s guidance as product revenue came in at $1,055 million for a 2% sequential decline, but a 15% increase over the same period last year. In addition, margins expanded across the board while non-GAAP EPS expanded and GAAP loss per share dropped. NXP Semiconductors NV also upped its guidance for the current quarter.
In the conference call, NXP Semiconductors NV’s CEO commented that the company has yet to see an economic rebound. And while there have been spots of order recovery, there is a lack of a confirmed sustained recovery while the computing market has showed secular weakness – factors that are driving profitability weakness in the company’s Standard Products segment. In the Q and A, it was further noted that the Standard Products segment has seen some impact from what's going on in the computing industry along with a “pretty weak mix” of products plus intermittent quality control problems over the last 18 months or so. Nevertheless and when probed about a divestiture, NXP Semiconductors NV's CEO reiterated his belief the company can fix the issues in the segment (and its those issues that have been holding the company back to some degree).
However and despite the headwinds, NXP Semiconductors NV’s CEO noted strong market positions in HPMS, Identification, Automotive and basestations plus he noted company-specific design wins in mobility and he reminded investors that the company’s strategy is to focus on providing unique and differentiated product solutions in order to outpace the cyclical growth of the overall semiconductor market.
NXP Semiconductors NV’s Recent Stock Performance
On Wednesday, NXP Semiconductors NV rose 1.53% to $27.15 (NXPI has a 52 week trading range of $18.57 to $32.99 a share) for a market cap of $6.84 billion. NXP Semiconductors NV is up 3.15% since the start of the year, up 17.1% over the past year and up 93.9% since August 2010:
Anyone who is a chart technician might want to check out the following technical chart:
The Bottom Line. If NXP Semiconductors NV can resolve the problems in its Standard Products segment, there’s a good chance investors will be rewarded – even with the economy being what it is.