(Reuters) – Chipmaker NXP Semiconductors forecast first-quarter profit above target and reported better-than-expected revenue for the last quarter on Monday, banking on a strong automotive market, a key consumer of its technology.
Netherlands-based NXP supplies manufacturers with chips and other technologies needed for high-speed digital processing used in industries such as automotive, manufacturing, telecom and the Internet of Things (IoT).
Manufacturing of light vehicles grew 9% globally last year and hit pre-pandemic production levels, according to a report by S&P Global. Meanwhile, growth in the U.S. auto market was its best since 2019 last year.
The automotive consumer segment grew 5% in the fourth quarter, accounting for 56% of NXP’s overall revenue in 2023.
NXP forecast adjusted profit per share for the March quarter between $2.97 and $3.38. The mid-point of the range is higher than the $3.15 consensus estimates from three analysts, according to LSEG data.
However, the revenue forecast came in at a midpoint of $3.13 billion, shy of expectations of $3.16 billion, due to anticipated weakness in the electric vehicles segment and the Chinese electronic market.
“We are navigating a soft landing by managing what is in our control, especially limiting over-shipment of products to customers,” said Kurt Sievers, NXP president and chief executive officer.
Revenue in the fourth quarter ended December 31, was $3.42 billion, higher than the consensus estimate of $3.40 billion.
Nasdaq-listed shares of NXP rose nearly 3% in trading after the bell. The stock closed 2.8% up on Monday.
(Reporting by Yuvraj Malik in Bengaluru; Editing by Tasim Zahid)
Uma Rajagopal has been managing the posting of content for multiple platforms since 2021, including Global Banking & Finance Review, Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune. Her role ensures that content is published accurately and efficiently across these diverse publications.