NXP Semiconductors Reports First Quarter 2016 Results


 Q1 2016 
Revenue$2,224 million 
GAAP Gross margin 26.8% 
GAAP Operating margin -21.2% 
GAAP Diluted earnings per share       ($1.16)         
   
Non-GAAP Gross margin 50.0% 
Non-GAAP Operating margin 23.3% 
Non-GAAP Diluted earnings per share  $1.14  
     

EINDHOVEN, The Netherlands, April 25, 2016 (GLOBE NEWSWIRE) -- NXP Semiconductors N.V. (NASDAQ:NXPI) today reported financial results for the first quarter 2016, ended April 3, 2016, and provided guidance for the second quarter of 2016. 

“NXP finished the first quarter of 2016 with strong performance and the merger of NXP and Freescale is proceeding smoothly.  I am pleased that we achieved our objectives in the first 90 days, and we are on track to achieve our cost synergy targets as laid out at the time of the merger announcement.  Our major accomplishments include the integration of our customer facing teams, clear alignment within our internal product development groups, and very positive progress on the integration of our operations and supply organizations.  Customer response to the merger continues to be outstanding,” said Richard Clemmer, NXP Chief Executive Officer.

“Looking at our reported results for the first quarter of 2016, revenue was $2.22 billion, an increase of 52 percent year-on-year, and an increase of 38 percent versus the prior quarter.  HPMS segment revenue was $1.9 billion, an increase of 73 percent year-on-year, and an increase of 46 percent from the prior quarter.  Standard Product segment revenue was $274 million, a decrease of 15 percent year-on-year and an increase of one percent from the prior quarter.  Our GAAP diluted net loss per share was ($1.16), primarily due to merger related accounting, and our non-GAAP diluted earnings per share of $1.14 was near the high end of our guidance, as a result of positive product mix and our driving early merger-related operational successes.  During the quarter we repaid $200 million of debt and we returned cash to shareholders by taking advantage of what we believe was dislocation in the equity markets relative to our share price, by repurchasing $298 million or approximately 4.1 million shares of our stock.

“On a comparable basis, taking into account previous product line divestures, our year on year revenue trends reflect the semiconductor industry weakness that accelerated throughout the second half of 2015, and affected both NXP and Freescale.  On a comparable basis, revenue was down approximately 11 percent year on year.  We believe we have begun to see incremental positive trends in a number of our businesses, with comparable sequential revenue up approximately two percent into the first quarter.  While we anticipate many of the headwinds experienced in the second half of 2015 should begin to generally subside in the coming quarters, the overall demand environment currently continues to be subdued.

“In summary, I am very pleased with the significant progress we have made. The integration of the two companies is on track to provide our customers with more complete leadership solutions, and achieve our stated goals. We are even more excited about the long-term potential of the new NXP.  I continue to be extremely proud of all our employees, and want to thank them for their intense focus, unrelenting hard work and positive mindset.  We are creating a company which is superbly positioned in our target markets,” said Clemmer.

Summary of Reported First Quarter 2016 Results ($ millions, except diluted EPS, unaudited)

             
             
    Q1 2016  Q4 2015  Q1 2015  Q - Q  Y - Y  
             
 Product Revenue $  2,185  $  1,577  $  1,427   38.6%  53.1% 
              
  Corporate & Other   $   39     $   29     $   40       34.5 %     -2.5 %  
                         
  Total Revenue   $     2,224     $     1,606     $     1,467       38.5 %     51.6 %  
                         
  GAAP Gross Profit   $     597     $     619     $     704       -3.6 %     -15.2 %  
                         
  Gross Profit Adjustments (1)   $   (515 )   $   (187 )   $   (7 )          
                         
  Non-GAAP Gross Profit   $     1,112     $     806     $     711       38.0 %     56.4 %  
                         
  GAAP Gross Margin     26.8 %     38.5 %     48.0 %          
                         
  Non-GAAP Gross Margin     50.0 %     50.2 %     48.5 %          
                         
  GAAP Operating Income   $     (471 )   $     1,013     $     295       NM       NM    
                         
  Operating Income Adjustments (1)         (990 )       580         (90 )          
                         
  Non-GAAP Operating Income   $     519     $     433     $     385       19.9 %     34.8 %  
                         
  GAAP Operating Margin     -21.2 %     63.1 %     20.1 %          
                         
  Non-GAAP Operating Margin     23.3 %     27.0 %     26.2 %          
                         
  GAAP Net Income / (Loss)   $     (398 )   $     972     $     (107 )     NM       NM    
                         
  Net Income Adjustments (1)       (799 )       631         (435 )          
                         
  Non-GAAP Net Income / (Loss)   $     401     $     341     $     328       17.6 %     22.3 %  
                         
  GAAP EPS   $     (1.16 )   $     3.56     $     (0.46 )     NM       NM    
  EPS Adjustments (1)   $   (2.30 )   $   2.31     $   (1.81 )          
  Non-GAAP EPS   $     1.14     $     1.25     $     1.35       -8.8 %     -15.6 %  
                         

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