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NXP Semiconductors Reports Second Quarter 2016 Results

Q2 2016
Revenue $2.365 billion
GAAP Gross margin
GAAP Operating margin
GAAP Diluted earnings per share
46.5%
(1.1%)
($0.04)
Non-GAAP Gross margin
Non-GAAP Operating margin
Non-GAAP Diluted earnings per share
50.0%
25.6%
$1.39

EINDHOVEN, The Netherlands, July 28, 2016 (GLOBE NEWSWIRE) -- NXP Semiconductors N.V. (NXPI) today reported financial results for the second quarter 2016, ended July 3, 2016, and provided guidance for the third quarter of 2016.

“NXP delivered solid results for the second quarter of 2016, with revenue at $2.37 billion, an increase of 57 percent year on year, an increase of 6 percent versus the prior quarter and $20 million above the mid-point of our guidance. HPMS segment revenue was $2.01 billion, an increase of 76 percent year-on-year, and an increase of approximately 5 percent from the prior quarter. Standard Product segment revenue was $303 million, a decrease of 6 percent year-on-year and an increase of 11 percent from the prior quarter. Our GAAP diluted net loss per share was ($0.04), primarily due to merger-related accounting, and our non-GAAP diluted earnings per share of $1.39 was near the high end of our guidance, as a result of positive fall through on incrementally higher revenue and good operating expense control. During the quarter, we repaid $100 million of debt and we returned cash to shareholders, by repurchasing $365 million or approximately 4.3 million shares of our stock,” said Richard Clemmer, NXP Chief Executive Officer.

“On a comparable basis, taking into account the Freescale merger and product line divestures, our year-on-year revenue trends reflect the semiconductor industry weakness that accelerated throughout the second half of 2015. On a comparable basis, total revenue was down approximately 8 percent year on year, notwithstanding our Automotive operating segment which delivered positive year-on-year comparable growth. We believe we have begun to see incremental positive trends in a number of our businesses, with comparable sequential revenue up approximately 6 percent into the second quarter. While we anticipate many of the headwinds experienced in the second half of 2015 should begin to generally subside in the coming quarters, the overall demand environment currently continues to be subdued.

“In summary, I am pleased with the progress we continue to achieve. In the second quarter we took another step in our journey, as we announced the divesture of our Standard Products business. We continue to anticipate the transaction to close in the first quarter of 2017. I would like to thank all of the members of the Standard Products business for their years of hard work and dedication,” said Clemmer.

Summary of Reported Second Quarter 2016 Results ($ millions, except diluted EPS, unaudited)

Q2 2016 Q1 2016 Q2 2015 Q - Q Y - Y
Product Revenue $ 2,317 $ 2,185 $ 1,468 6.0 % 57.8 %
Corporate & Other $ 48 $ 39 $ 38 23.1 % 26.3 %
Total Revenue $ 2,365 $ 2,224 $ 1,506 6.3 % 57.0 %
GAAP Gross Profit $ 1,099 $ 597 $ 724 84.1 % 51.8 %
Gross Profit Adjustments (1) $ (84 ) $ (515 ) $ (10 )
Non-GAAP Gross Profit $ 1,183 $ 1,112 $ 734 6.4 % 61.2 %
GAAP Gross Margin 46.5 % 26.8 % 48.1 %
Non-GAAP Gross Margin 50.0 % 50.0 % 48.7 %
GAAP Operating Income $ (26 ) $ (471 ) $ 332 NM NM
Operating Income Adjustments (1) (632 ) (990 ) (86 )
Non-GAAP Operating Income $ 606 $ 519 $ 418 16.8 % 45.0 %
GAAP Operating Margin -1.1 % -21.2 % 22.0 %
Non-GAAP Operating Margin 25.6 % 23.3 % 27.8 %
GAAP Net Income / (Loss) $ (13 ) $ (398 ) $ 300 NM NM
Net Income Adjustments (1) (499 ) (799 ) (51 )
Non-GAAP Net Income / (Loss) $ 486 $ 401 $ 351 21.2 % 38.5 %
GAAP EPS $ (0.04 ) $ (1.16 ) $ 1.23 NM NM
EPS Adjustments (1) $ (1.43 ) $ (2.30 ) $ (0.21 )
Non-GAAP EPS $ 1.39 $ 1.14 $ 1.44 21.9 % -3.5 %

(1) Please see “Non-GAAP Financial Measures” on page 4 of this release

Additional Information for the Second Quarter 2016:

  • In recent months the U.S. Securities and Exchange Commission (“SEC”) has increased its focus on the general use of non-GAAP financial metrics and reporting by U.S. listed companies. In May 2016, the SEC issued new and revised Compliance & Disclosure Interpretations that relate to the reporting of non-GAAP financial measures by all U.S. listed companies (www.sec.gov/divisions/corpfin/guidance/nongaapinterp.htm ). As a result, NXP has re-evaluated its use of non-GAAP financial information, to ensure that when used in...

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