NXP shares fall 7.7% after hours despite Q3 revenue up 19%

NXP Semiconductors N.V. (NXPI) reported third-quarter revenue of $3.79 billion, up 19% from a year earlier, according to its earnings release on Oct. 27. Non-GAAP diluted earnings per share were $4.20. The company also said its board authorized a $5 billion share repurchase program.

Shares fell 7.7% in after-hours trading as of 5:26 p.m. ET, from a regular-session close of $253.91.

Revenue was below the $3.84 billion consensus estimate compiled by Finnhub. Non-GAAP EPS was in line with the $4.17 consensus estimate from the same source.

Here's how the company did:

• Non-GAAP diluted EPS: $4.20 vs. $3.11 a year earlier, in line with $4.17 expected, according to Finnhub
• GAAP diluted EPS: $3.48 vs. $2.48 a year earlier
• Revenue: $3.79 billion vs. $3.17 billion a year earlier, below the $3.84 billion expected, according to Finnhub
• Non-GAAP gross margin: 58.6% vs. 57.0% a year earlier
• Non-GAAP operating margin: 37.1% vs. 33.8% a year earlier

Revenue rose 8% from the previous quarter, when it was $3.50 billion.

Rafael Sotomayor, NXP President and Chief Executive Officer, said: “Strong profitability leading to free cash flow generation enables NXP to invest in innovative solutions and expand manufacturing capabilities that support our long-term growth objectives.”

Segment results

Automotive revenue was $2.07 billion, up 13% from a year earlier.

Industrial & IoT revenue was $802 million, up 39% from a year earlier.

Communications infrastructure and other revenue was $503 million, up 54% from a year earlier.

Mobile revenue was $411 million, down 4% from a year earlier but up 17% from the prior quarter.

Guidance for the fourth quarter

The company expects fourth-quarter revenue of $3.75 billion to $3.95 billion, with a midpoint of $3.85 billion.

It expects non-GAAP diluted EPS of $4.14 to $4.58, with a midpoint of $4.36. On a GAAP basis, it expects diluted EPS of $3.36 to $3.79.

Cash and capital returns

Operating cash flow was $1.26 billion, and non-GAAP free cash flow was $1.21 billion, or 31.9% of revenue.

The company returned $359 million to shareholders during the quarter, or 29.8% of non-GAAP free cash flow. That included $256 million in dividends and $103 million in share buybacks.

The board authorized a $5 billion share repurchase program in October, in addition to the $1.3 billion remaining under the prior authorization.

Operating milestones

On Aug. 4, the company said the BMW Group would deploy its Trimension Ultra-Wideband ranging and radar solutions across its fleet, starting with selected 2026 vehicle programs.

On Aug. 12, the company broke ground on an assembly and test site expansion in Malaysia.

On Sept. 28, the VSMC joint venture with Vanguard International Semiconductor Corporation marked the grand opening of its first 300mm fab in Singapore.