Embedded-semiconductor specialist NXP Semiconductors (NASDAQ: NXPI) reported first-quarter results late Monday evening. The company delivered both revenue and operating profit above the midpoints of management's guidance ranges, despite undeniable downtrends across the board. NXP Semiconductors' first-quarter results: The raw numbers Metric Q1 2019 Q1 2018 Year-Over-Year Change Revenue $2.10 billion $2.27 billion (8%) Net income (loss) ($21 million) $276 million N/A GAAP earnings (loss) per share (diluted) ($0.07) $0.94 N/A Data source: NXP Semiconductors. What happened with NXP Semiconductors this quarter? Revenues were soft across the board. Industrial sales had the weakest showing, falling 14% year over year to $368 million. At the other end of that spectrum, automotive revenue fell 8% to $1.04 billion. Three months ago, management guided first-quarter sales to roughly $2.09 billion alongside operating profit of $44 million. NXP edged out the revenue target by a rounding error and delivered $54 million in GAAP operating profit. NXP produced $152 million of free cash flow in the first quarter, 73% below the $561 million seen in the year-ago period. The company bought back 8.5 million shares of its own stock during this quarter, reducing the share count by 3% at a total cost of $715 million. Image source: Getty Images. What management had to say The product mix in NXP's largest division -- automotive computing -- is shifting toward higher-growth target markets. On the first-quarter earnings call, CEO Rick Clemmer explained (based on a transcript by Seeking Alpha): Thirty percent of our auto business is focused on high-growth sectors like ADAS [Advanced Driver Assistance Systems] and electrification, which has grown at nearly 40% in compounded growth rate since 2015, and which we expect to continue to grow at [a] 25% to 30% compounded growth rate as the business becomes more material in size. The other 70% of our automotive business represents a very large and entrenched core business with hot barriers to entry. We anticipate our core business will grow at a modest premium to the overall auto semiconductor market. Adding more color, Clemmer noted that ADAS accounts for about 10% of NXP's automotive revenue these days, but the business has grown by a compound annual rate of nearly 50% over the last four years. The company is already a leader in this space and expects to continue outgrowing the general ADAS market by about 40% for the foreseeable future. Looking ahead Management provided the following guidance targets for the second quarter, presented here as the midpoint of each guidance range: Revenue should fall roughly 4% to $2.20 billion. Gross profit is trending toward approximately $1.15 billion, about 3% below the year-ago result. GAAP operating income was guided to $70 million, a 10% year-over-year decline. Beyond that, Clemmer sees an improving demand environment in the second half of 2019, with the caveat that macroeconomic tensions remain unpredictable around the world, especially in China. 10 stocks we like better than NXP SemiconductorsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and NXP Semiconductors wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of March 1, 2019Anders Bylund owns shares of NXP Semiconductors. The Motley Fool recommends NXP Semiconductors. The Motley Fool has a disclosure policy.Source