NXP Semiconductors Faces Mixed Expectations Ahead of Earnings Report
NXP Semiconductors N.V. (NXPI), based in Eindhoven, the Netherlands, stands as a prominent player in the semiconductor industry. With a market cap of $54.2 billion, the company specializes in high-performance mixed-signal and standard product solutions. Its products extend across various fields, including automotive, industrial, IoT, mobile, and communication infrastructure. As the leading provider in automotive processing and networking, NXPI is set to share its fiscal fourth-quarter earnings for 2024 on February 3.
Profit Forecasts Show Declining Earnings
Before the announcement, analysts anticipate NXPI will report earnings of $2.62 per share on a diluted basis. This figure reflects a 22.3% decrease from the $3.37 per share reported in the same quarter last year. Over the past year, the company has alternated between exceeding and falling short of consensus estimates, achieving or meeting expectations in three out of the last four quarters.
Full-Year Earnings Predictions
For the entire fiscal year, analysts project NXPI will report earnings per share (EPS) of $11.33, which marks a decline of 10.8% compared to $12.70 in fiscal 2023. A further decline is expected, with projections estimating EPS will drop to $10.76 in fiscal 2025, representing a 5% decrease year over year.
Stock Performance Compared to Market
NXPI’s stock performance has lagged behind the S&P 500’s, which gained 25.8% over the past year, with NXPI shares growing only 3.3% in the same timeframe. In addition, it also fell behind the Technology Select Sector SPDR Fund’s (XLK) gains of 27.1% during this period.
Demand Challenges Impacting NXPI
NXPI’s struggles can be traced back to weakened demand for its microchips in critical market segments, such as automotive, industrial, and IoT. Factors like reduced consumer spending, economic uncertainties, and cautious business investments have contributed to this decline.
In its Q3 report released on November 4, NXPI revealed an adjusted EPS of $3.45, slightly higher than the Wall Street expectation of $3.43. However, this positive outcome was overshadowed by a more than 5% stock drop in the following trading session. The company’s revenue stood at $3.3 billion, aligning with forecasts. Looking ahead to Q4, NXPI expects adjusted EPS to reach $2.93, with projected revenue between $3 billion and $3.2 billion.
Analysts Maintain a Positive Outlook
Despite mixed recent performance, analysts retain a moderately bullish outlook on NXPI stock, rating it as a “Moderate Buy” overall. Among the 27 analysts monitoring the stock, 17 recommend a “Strong Buy,” two favor a “Moderate Buy,” seven advocate for a “Hold,” and one suggests a “Strong Sell.” The average price target among analysts stands at $263.52, indicating a potential upside of 24% from current levels.
On the date of publication, Neha Panjwani did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information presented is for informational purposes. For additional details, refer to the Barchart Disclosure Policy here.
The views and opinions expressed belong solely to the author and do not necessarily reflect those of Nasdaq, Inc.
