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NXP Semiconductors NV Management Discusses Q2 2012 Results - Earnings Call Transcript

Richard L. Clemmer

Thanks, Jeff and welcome, everyone, to our earnings call today. As is our practice, I will address revenue trends in our various markets and channels with Peter Kelly, now providing more color on profitability and other financial metrics.

We are very pleased with our performance in the second quarter as we delivered product revenue of $1.02 billion, up 12% sequentially above the high end of our original guidance. NXP revenue was $1.09 billion, up nearly 12% sequentially, also above the upper end of our guidance range. We experienced growth in every one of our target end markets, a positive indication that company specific opportunities we have previously addressed are coming to fruition. We acknowledge the macroenvironment has clearly weakened, however, we see our growth in the intermediate term as less dependent on the cyclical industry rebound and more a function of unique company-specific design wins.

From a segment perspective, HPMS revenue was $803 million, a 13% sequential increase and $30 million above the midpoint of our guidance. As Jeff commented, we have changed 2 of our end market definitions within HPMS to better reflect our strategic focus in the mobile computing and specialized industrial areas. My comments today will reflect these new definitions.

Overall, we experienced solid growth in all of our HPMS segment end markets and in most cases delivered performance above our guidance. Within our Automotive business, revenue was $244 million, up nearly 7% above the high end of our expectations with record levels set in North America and China markets. From a product perspective, we experienced strong sequential demand for entertainment and sensor products with keyless door entry products in line with our expectations while in-vehicle networking declined modestly in the quarter principally due to softening demand from European automotive OEMs. However, we continue to see luxury brands driving resilient demand and trends in North America and Japan strengthened during the quarter, albeit with increasing chatter of weakening demand for mass-market vehicle in Europe, Middle East and Africa.

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