NXP Semiconductors Analysts Laud Fourth-Quarter Results

NXP Semiconductors' fourth-quarter earnings drew positive responses from Wall Street's analyst community.
Author:
Publish date:

Analysts had good things to say about NXP Semiconductors (NXPI) - Get Report after the Dutch chipmaker beat Wall Street's fourth-quarter revenue expectations and provided a strong outlook.

Fourth-quarter net income fell 59% to $114 million, or 40 cents a share, from $276 million, or 94 cents, in the year-earlier quarter. Analysts surveyed by FactSet were estimating 31 cents a share.

Revenue totaled $2.3 billion, down 4.2% from $2.4 billion. Analysts were looking for $2.28 billion. 

For the first quarter NXP said it expected revenue of $2.2 billion to $2.26 billion while Wall Street is calling for $2.17 billion.

"As we look forward to 2020, we are increasingly confident that the demand trends within our end markets are beginning to moderately improve," CEO Richard Clemmer said in a statement.

While noting that the results were mixed, John Vinh, an analyst with KeyBanc Capital Markets, said the company's outlook was solid. Vinh has an overweight rating on the stock with a $155 price target.

In March 2019, NXP agreed acquire Marvell's  (MRVL) - Get Report wi-fi-connectivity business in a $1.76 billion cash deal.

Evercore ISI analyst CJ Muse said that there are "clearly some moving parts” as a result of the asset acquisition, but “net net, this report appears about as expected with very little surprises." Muse rates the stock outperform with a $160 price target.

Chris Caso, an analyst with Raymond James, said the report demonstrates “good progress toward a recovery for what we feel is an attractively valued stock with good
margin leverage potential.”

Caso, who rates the stock outperform, said the outlook “was slightly ahead of our expectation and reflects better than seasonal trends, consistent with our view that a modest recovery is underway.”

William Stein, a SunTrust Robinson Humphrey analyst, said “the sales beat matters more than what appears to be a speed-bump in profitability,” since the “demand read overwhelms what we expect is a temporary profitability concern.” 

He has a buy rating on NXP with a $139 price target.

At last check NXP stock was up 3.8% at $130.47. On Tuesday it has traded up as much as 7%.  Through Monday the stock was 47% higher from late March 2019, when it set a 52-week low above $85.