NXP Semiconductors Reports Third Quarter 2015 Results

 

  Q3 2015
Revenue $1,522 million
GAAP Gross margin   48.6 %
GAAP Operating margin   24.6 %
GAAP Diluted earnings per share $ 1.49  
   
Non-GAAP Gross margin   49.1 %
Non-GAAP Operating margin   29.5 %
Non-GAAP Diluted earnings per share $ 1.57  
       

EINDHOVEN, The Netherlands, Oct. 28, 2015 (GLOBE NEWSWIRE) -- NXP Semiconductors N.V. (NASDAQ:NXPI) today reported financial results for the third quarter ended October 4, 2015, as well as provided limited guidance for the fourth quarter of 2015. 

“Our profitability in the third quarter of 2015 was very strong, as NXP delivered total revenue of $1.52 billion and non-GAAP operating margin of nearly 30 percent.  Revenue was approximately flat versus the same period in the prior year, and increased about one percent from the prior quarter, but below the lower end of our guidance.  In spite of slightly weaker revenue trends, non-GAAP diluted earnings per share were $1.57, above the high-end of guidance, as a result of better gross margin and expense control resulting in improved profit fall-through. Additionally we generated $266 million non-GAAP free cash flow,” said Richard Clemmer, NXP Chief Executive Officer. 

“As we entered the third quarter, we noted a weakening of demand as our customers began to communicate concerns with an uncertain economic environment.  As the third quarter progressed, our end-customers, across multiple end-markets continued to voice an increased and significant degree of uncertainty around any increase in demand.  This has resulted in lower than planned sell-through and an increase of channel inventory.  As a result, our guidance for the fourth quarter reflects a much more cautious view of near term sales which may occur during the quarter.

“Notwithstanding the current business trends, we continue to make significant progress with the previously announced merger between NXP and Freescale Semiconductor, which we continue to believe will represent a transformation of NXP.  The overall regulatory approval process is progressing as anticipated and we believe we are on track to close the transaction in the fourth quarter of 2015.  We continue to make very good progress on the integration planning of the two companies.  We believe the merger of the two companies will drive significant cost synergies and broaden our product platform which will provide a significant catalyst for customer and shareholder value creation,” said Clemmer.

Summary of Third Quarter 2015 Results ($ millions, except diluted EPS, unaudited)

                       
    Q3 2015   Q2 2015   Q3 2014   Q - Q   Y - Y  
                       
Product Revenue   $   1,489     $   1,468     $   1,472       1.4 %     1.2 %  
                       
Corporate & Other   $   33     $   38     $   43       -13.2 %     -23.3 %  
                       
Total Revenue   $     1,522     $     1,506     $     1,515       1.1 %     0.5 %  
                       
GAAP Gross Profit   $     740     $     724     $     713       2.2 %     3.8 %  
                       
Gross Profit Adjustments (1)   $   (8 )   $   (10 )   $   (12 )          
                       
Non-GAAP Gross Profit   $     748     $     734     $     725       1.9 %     3.2 %  
                       
GAAP Gross Margin     48.6 %     48.1 %     47.1 %          
                       
Non-GAAP Gross Margin     49.1 %     48.7 %     47.9 %          
                       
GAAP Operating Income   $     375     $     332     $     307       13.0 %     22.1 %  
                       
Operating Income Adjustments (1)       (74 )       (86 )       (83 )          
                       
Non-GAAP Operating Income   $     449     $     418     $     390       7.4 %     15.1 %  
                       
GAAP Operating Margin     24.6 %     22.0 %     20.3 %          
                       
Non-GAAP Operating Margin     29.5 %     27.8 %     25.7 %          
                       
GAAP Net Income / (Loss)   $     361     $     300     $     121       20.3 %     198.3 %  
                       
Net Income Adjustments (1)       (19 )       (51 )       (213 )          
                       
Non-GAAP Net Income / (Loss)   $     380     $     351     $     334       8.3 %     13.8 %  
                       
GAAP EPS   $     1.49     $     1.23     $     0.49       21.1 %     204.1 %  
EPS Adjustments (1)   $   (0.08 )   $   (0.21 )   $   (0.86 )          
Non-GAAP EPS   $     1.57     $     1.44     $     1.35       9.0 %     16.3 %  
   
  1. Please see “Discussion of GAAP to non-GAAP Reconciliation” on page 2 of this release.

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