LONDON – Chip company NXP Semiconductors NV has reported a $182 million net loss on revenues of $931 million in the fourth quarter of 2011. The loss contrasted with a net profit of $301 million in 3Q11 and was larger than the net loss of $118 million reported for 4Q10.
Revenue was down 12.2 percent from $1.06 billion in 3Q11 and down 13.6 percent from $1.078 billion in 4Q10, but product revenue, at $857 million, was roughly at the mid-point of original guidance given in November 2011.
For the full year of 2011 NXP (Eindhoven, The Netherlands) reported a net profit of $390 million on revenues of $4.194 billion. This compared with a net loss of $456 million on revenues of $4.402 billion in 2010. Over the full year NXP product revenue increased by 3.7 percent from $3.694 billion in 2010 to $3.831 billion in 2011. Total revenue declined by 4.7 percent affected by a decline in manufacturing services revenue.
The company's net debt delined by was reduced by $597 million from the end of 2010 to stand at $3.056 billion at the end of 2011.
The company forecast that revenues in 1Q12 would be between $927 million and $984 million, with the mid-point of $956 million showing a slight gain from 4Q11.
Revenue in 4Q11 was hit by the expiry of some contracts to manufacture chips for previously divested businesses, the company said. Also, during the fourth quarter of 2011 took steps for the future closure of the ICN4 and ICN6 wafer fabs in Nijmegen, in the Netherlands and took actions to lower headcount in Europe, which incurred restructuring charges of $59 million in 4Q11. The lines will remain operational for some quarters but work is being transferred to NXP's ICN8 200-mm wafer fab, said CEO Rick Clemmer.
Utilization in NXP wafer fabs averaged 71 percent in the fourth quarter 2011 compared to 97 percent in the year ago period and 79 percent in the prior quarter.
"Looking back over 2011, NXP successfully achieved several key initiatives laid out at the time of our IPO. First, we outpaced the growth of our comparable peer group as full-year product revenue increased nearly 4 percent year-on-year. Secondly, we made good progress on our margin expansion goals, as our ongoing focus to lower manufacturing costs and align operating expenses enabled NXP to deliver nearly a 31 percent increase year-on-year in GAAP operating income. Lastly, we significantly improved our capital structure as net debt declined by $597 million or 16 percent versus 2010 and we de-risked our short-term maturity profile through refinancing actions related to our 2013 maturities," said Clemmer, in a statement. "Furthermore, despite the significant inventory correction during the second half of 2011, we continue to experience very strong customer adoption of our technology, a validation of our strategic direction, which we believe, will enable the continued transformation of NXP."
Clemmer said he was "cautiously optimistic" that inventory correction was more or less complete but noted the general economic environment remains uncertain. Clemmer said NXP was seeing improved order rates in 2012 so far. Clemmer forecast that NXP would outperform market growth in 2012.