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Why NXP Semiconductor (NXPI) Is Gaining Today

Stocks in this article: NXPI

NEW YORK (TheStreet) -- NXP Semiconductor (NXPI) gained 5.2% to $49.47 Thursday after beating analyst estimates with its fourth-quarter earnings report.

For the fourth quarter the chipmaker posted earnings of 99 cents a share, beating the Capital IQ Consensus Estimate of 95 cents a share by 4 cents. Revenue rose 15.9% to $1.29 billion in the quarter. Analysts estimated revenue of $1.27 billion.

For the first quarter NXP Semiconductor expects earnings of between 84 cents and 96 cents a share. Analysts estimate earnings of 89 cents a share for the quarter. The company's guidance sees revenue between $1.21 billion and $1.25 billion, compared to analyst expectations of $1.23 billion.

Must read: Today's Momo Momentum Stock Is NXP Semiconductor (NXPI)

TheStreet Ratings team rates NXP SEMICONDUCTORS NV as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate NXP SEMICONDUCTORS NV (NXPI) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and good cash flow from operations. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • NXPI's revenue growth has slightly outpaced the industry average of 4.4%. Since the same quarter one year prior, revenues slightly increased by 6.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Semiconductors & Semiconductor Equipment industry average. The net income increased by 34.8% when compared to the same quarter one year prior, rising from $115.00 million to $155.00 million.
  • NXP SEMICONDUCTORS NV has improved earnings per share by 33.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NXP SEMICONDUCTORS NV reported poor results of -$0.48 versus -$0.20 in the prior year. This year, the market expects an improvement in earnings ($3.24 versus -$0.48).
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, NXP SEMICONDUCTORS NV's return on equity is below that of both the industry average and the S&P 500.
  • The debt-to-equity ratio is very high at 3.08 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, NXPI maintains a poor quick ratio of 0.95, which illustrates the inability to avoid short-term cash problems.
  • You can view the full analysis from the report here: NXPI Ratings Report

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