NXP Semiconductors said on Tuesday that it expects second-quarter revenue and adjusted profit per share to come in above analysts' expectations, a forecast the company attributes to a continued recovery in its industrial and automotive end markets. The guidance sparked a roughly 15% rise in NXP's share price during after-hours trading.
The chipmaker, which earns the bulk of its sales from automotive and industrial customers, reported that new orders are increasing following a prolonged slump. That slump followed a period of excess inventory accumulation during the pandemic, and customers have been clearing those inventories, the company said.
For the quarter ending in June, NXP gave a revenue range of $3.35 billion to $3.55 billion. That guidance compares with a consensus estimate of $3.27 billion compiled by LSEG.
On the profit front, NXP forecast adjusted earnings per share between $3.29 and $3.72 for the quarter, above the $3.17 per-share estimate reflected in LSEG data.
The company's own results for the first quarter were ahead of expectations as well. NXP reported first-quarter revenue of $3.18 billion versus estimates of $3.16 billion. On an adjusted basis, the company earned $3.05 per share, above the $2.95-per-share estimate.
The positive outlook from NXP follows a similarly upbeat forecast from analog chipmaker Texas Instruments last week, which the article said was supported by demand in data center and industrial chips.
Context and market reaction
NXP's revenue and profit outlook assumes an ongoing improvement in the industrial and automotive chip markets as end-market customers reduce inventories they accumulated during the pandemic. The company reported that new orders are on the rise, signaling a potential stabilization after the earlier slump.
The market responded immediately to NXP's guidance, with the company's shares jumping about 15% in extended trading following the announcement.
What NXP reported versus expectations
- Q2 revenue guidance: $3.35 billion to $3.55 billion (LSEG estimate: $3.27 billion).
- Q2 adjusted EPS guidance: $3.29 to $3.72 (LSEG estimate: $3.17).
- Q1 revenue: $3.18 billion (estimate: $3.16 billion).
- Q1 adjusted EPS: $3.05 (estimate: $2.95).
The company highlighted the automotive and industrial markets as the primary drivers of its revenue base and the areas where order activity has begun to improve.
Broader semiconductor note
The article noted that Texas Instruments also issued a strong forecast the prior week, with strength tied to data center and industrial chip demand, suggesting pockets of improvement across parts of the analog and industrial semiconductor landscape.