NXP Semiconductors N.V.
CEO : Mr. Kurt Sievers
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2022 Q4 | 9.0% YoY | 21.4% | 22.5% | 2023-01-31 |
Kurt Sievers says,
Quarter Four 2022 Performance
- Revenue was $3.31 billion, a 9% YoY increase, $12 million better than the midpoint of the guidance.
- Non-GAAP operating margin in Quarter Four was a strong 36.5%, 160 basis points better than the year ago period.
- Automotive revenue was $1.81 billion, up 17% YoY, in line with guidance.
- Industrial and IoT revenue was $605 billion, down 8% YoY but better than guidance.
- Mobile revenue was $408 million, up 9% YoY and better than guidance.
- Communication Infrastructure and Other revenue was $494 million, up 8% YoY but below guidance.
Full Year 2022 Performance
- Revenue was a record $13.21 billion, a 19% YoY increase.
- Automotive revenue was $6.88 billion, up 25% YoY.
- Industrial and IoT revenue was $2.71 billion, up 13% YoY.
- Mobile revenue was $1.61 billion, up 14% YoY.
- Communication Infrastructure and Other revenue was $2 billion, up 15% YoY.
Guidance for Quarter One 2023
- Guiding quarter one revenue to $3 billion, down about 4% versus the first quarter of ’22.
- Automotive is expected to be up in the mid-teens percent range versus quarter one ’22 and flat versus quarter four ’22.
- Industrial and IoT is expected to be down in the low 30% range YoY and down in the low 20% range versus quarter four ’22.
- Mobile is expected to be down about in the mid-40% range, both on a YoY and sequential basis.
- Communication Infrastructure and Other is expected to be about flat, both on a YoY and sequential basis.
Accelerated Growth Drivers
- The accelerated growth drivers are 77 gigahertz radar, electrification and the S32 domain and solar processes, all of which are tracking ahead of plan within Automotive.
- Within Industrial and IoT, we are in line with our expected growth range of about 25% 3 year CAGR for our accelerated growth drivers.
- For Mobile, we are below our expected revenue growth range for the accelerated growth driver of ultra-wideband due to the well-documented weakness in the Android handset market.
- Within Communications and Infrastructure, we are in line with our expected revenue growth range for RF power amplifiers.
Bill Betz says,
Financial Performance
- Full year revenue for 2022 was $13.21 billion, up 19% YoY.
- Non-GAAP gross margin of 57.9%, up 180 basis points YoY.
- Total non-GAAP operating expenses were $2.86 billion or 21.6% of revenue.
- Non-GAAP operating profit was $4.79 billion, up 32% YoY, reflecting a non-GAAP operating margin of 36.3%.
- Repurchased 8.33 million shares for $1.43 billion and paid cash dividends of $815 million or 21% of cash flow from operations.
Q4 Highlights
- Total revenue was $3.31 billion, up 9% YoY.
- Total non-GAAP operating expenses were $713 million or 21.5% of revenue.
- Non-GAAP operating profit was $1.21 billion, and non-GAAP operating margin was 36.5%.
- Ending cash position was $3.85 billion, up $86 million sequentially.
- Paid $221 million in cash dividends and repurchased $475 million of our shares.
Working Capital Metrics
- Days of inventory was 116 days, an increase of 17 days sequentially.
- Days receivable were 26 days, down one day sequentially and days payable were 105 days.
- Cash conversion cycle was 37 days, an increase of 7 days versus the prior quarter.
Q1 Expectations
- Anticipate Q1 revenue to be $3 billion, plus or minus about $100 million.
- Expect non-GAAP gross margin to be about 58% plus or minus 50 basis points.
- Operating expenses are expected to be about $710 million, plus or minus about $10 million.
- Non-GAAP operating margin to be 34.3% at the midpoint.
- Implying a non-GAAP earnings per share of $3.01.
Focus Areas for NXP in 2023
- Plan to execute and drive six company-specific accelerated growth drivers.
- Manage internal and channel inventory thoughtfully based on market conditions.
- Continue to be disciplined with operating expenses, while protecting long-term R&D investments.
Q & A sessions,
NXPI Q4 2022 Earnings Call Transcript in its entirety, there are a few key points that are expected to have a significant impact on the stock’s movement:
China Weakness and Inventory Management
- NXPI is being very vigilant in managing channel inventory due to weakness in China, specifically related to a change in corporate policy and a spike in infection rates.
- This weakness is seen across all segments and is related to distribution, rather than a specific segment.
- As soon as signs of a consistent rebound in China are seen, NXPI has the orders and product at hand to fill back the channel.
Q4, Q1, and Full-Year Outlook
- Q4 saw flat growth from a quarter-on-quarter perspective due to supply constraints. Q1 is expected to be a mixed bag, with Automotive distribution in China experiencing a decline while the rest of the business is going up.
- For the full year, NXPI is optimistic, with the total car production expected to increase by 3.5% to about 85 million, and a continued increase in xEV penetration.
- NXPI expects to have most of the shortages behind them by the end of calendar year ’23.
- Pricing continues to play a role, with continued pressure on supply leading to pricing tailwinds, especially in Automotive and Core Industrial.
Communication Infrastructure and Other Segments
- NXPI sees a cautious outlook for the radio power part of the business due to build-outs in network infrastructure in India and the fast shift towards gallium nitride over LDMOS.
- RFID tagging, secure and access cards, and government identity products are expected to generate growth this year due to pent-up demand.
Supply Capability and NCNRs
- NXPI expects to serve about 90% to 95% of risk-adjusted backlog for ’23, up from 85% for ’22.
- The auto part of the business has a low DIO, and product specific to the lease in Automotive is well below target.
- NCNRs are executed strictly for products that are customized and cannot be moved around to other customers, and are flexible for fungible products and overriding commercial agreements.
No bad stock 