- Q3 earnings and revenues beat consensus
- NXP is a vital chip supplier to automotive manufacturers
- Share price has turned a sharp corner this month
If more evidence was needed that the microchips shortage that had left global car production on the hard shoulder has eased, the latest quarterly results from NXP Semiconductors (NXPI:NASDAQ) seems to provide it.
The Nasdaq-listed Dutch company is one of a handful of microchip firms that feed the increasingly hungry automotive industry, so topping Wall Street estimates in the third quarter helped the stock’s traction as it turns a sharp corner since the end of October.
Since closing at $170.18 on 30 October, the shares have rallied more than 7% to close overnight at $182.80.
NXP reported forecasts-beat EPS (earnings per share) of $3.70 on revenue of $3.43 billion, bettering consensus pitched at $3.61 on $3.40 billion.
CAR IS THE STAR
Crucial to that performance was its automotive unit, which drives the bulk of growth, reporting a 5% sales rise year-on-year to $1.89 billion. The smaller internet of things connectivity unit saw revenue decline 15% in Q3 year-on-year, while mobile revenue was down 8% year-on-year.
Looking ahead, the company guided to Q4 adjusted EPS of $3.65 on revenue of $3.4 billion, roughly what analysts had been projecting.
