NXP Semiconductors Profit Drops Sharply
October 26 2016 - 9:17PM
Dow Jones News
By Maria Armental
NXP Semiconductors NV's profit dropped sharply as operating
expenses more than doubled, even as acquisitions and continued
strength in its automotive segment drove another revenue surge.
The Dutch company -- best known for designing smartphone chips
used in automotive systems, identification and transit cards -- is
in talks to merge with Qualcomm Inc., the Wall Street Journal
reported, part of a consolidation wave as the chip sector reacts to
slower growth.
A conference call with analysts is scheduled for Thursday
morning.
Shares, up 17% this year, edged down to $98 in after-hours
trading.
NXP started as the semiconductor arm of electronics giant
Philips NV and has expanded into one of the largest computer-chip
companies with more than $6 billion in sales and a market
capitalization of more than $34 billion. Today, it is the No.1
supplier of automotive chips, a fast-growing market.
The company, which is selling its Standard Products business in
a deal expected to close early next year, had reported two straight
quarters of losses, driven by charges from the Freescale
Semiconductor merger.
Over all, third-quarter profit plunged to $91 million, or 26
cents a share.
Revenue surged 62% to $2.47 billion, in line with the company's
projections. However, excluding revenue from Freescale and other
adjustments, NXP said, revenue would have been down about 3%.
Gross profit margin narrowed to 48% from 48.6% a year
earlier.
NXP ended the quarter with about $1.57 billion in cash and $9.4
billion in debt.
For the current quarter, it projects $2.39 billion to $2.49
billion in revenue, compared with analysts' $2.42 billion,
according to Thomson Reuters.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
October 26, 2016 22:02 ET (02:02 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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