NXP swings to profit on flat Q3 sales

LONDON – NXP Semiconductors NV, the former semiconductor business of Koninklijke Philips Electronics NV, made a net profit of $369 million on revenue of $1,213 million in the third quarter of 2010 on a GAAP basis. This compares to a net loss of $362 million in the previous quarter on sales of $1,201 million. On a non-GAAP basis the profit increased from $93 million in Q2 to $117 million in Q3.

The sales revenue increased by 1.0 percent on Q2 and was up by 12.6 percent from a year ago. "The third quarter represented our sixth consecutive quarter of growth and significant operational improvement, as we continue to execute on our High Performance Mixed Signal solutions strategy," said Richard Clemmer, chief executive officer of NXP (Eindhoven, The Netherlands), in a statement.

"Compared to the year ago quarter, revenue was up 25 percent on a comparable basis and NXP achieved 17.4 percent non-GAAP operating margin as we continued to see good results from our Redesign Program. We've seen particular success in identification, automotive entertainment and networking, microcontrollers, base stations and lighting markets."

Clemmer said that high-performance mixed-signal (HPMS) now represents 70 percent of NXP's product revenue.

HPMS revenue in the third quarter was $715 million, an increase of 35.7 percent from the same quarter a year before on a comparable basis. However, compared to the prior quarter HPMS revenue was essentially flat as capacity constraints limited growth in certain identification, microcontroller and automotive areas while at the same time, in specific consumer and PC market areas, demand was not as strong as in the prior quarter.

NXP said that is expects product revenue in the fourth quarter to be flat sequentially as the chip market returns to seasonal growth patterns. The non-GAAP operating income is expected to be up by between 3 and 7 percent sequentially as margins continue to benefit from the ongoing restructuring program.

The company made net capital expenditure on property, plant and equipment of $67 million in the third quarter bringing the year-to-date up to $166 million, compared to $42 million year-to-date last year.


Related links and articles:

NXP profits in Q2, capacity is limited

Philips to 'give away' $450m stake in NXP

Interview: NXP's Clemmer on IPO, future challenges