OREANDA-NEWS. NXP Semiconductors N.V. today reported financial results for the second quarter 2016, ended July 3, 2016, and provided guidance for the third quarter of 2016. 

“NXP delivered solid results for the second quarter of 2016, with revenue at $2.37 billion, an increase of 57 percent year on year, an increase of 6 percent versus the prior quarter and $20 million above the mid-point of our guidance.  HPMS segment revenue was $2.01 billion, an increase of 76 percent year-on-year, and an increase of approximately 5 percent from the prior quarter.  Standard Product segment revenue was $303 million, a decrease of 6 percent year-on-year and an increase of 11 percent from the prior quarter.  Our GAAP diluted net loss per share was ($0.04), primarily due to merger-related accounting, and our non-GAAP diluted earnings per share of $1.39 was near the high end of our guidance, as a result of positive fall through on incrementally higher revenue and good operating expense control.  During the quarter, we repaid $100 million of debt and we returned cash to shareholders, by repurchasing $365 million or approximately 4.3 million shares of our stock,” said Richard Clemmer, NXP Chief Executive Officer.

“On a comparable basis, taking into account the Freescale merger and product line divestures, our year-on-year revenue trends reflect the semiconductor industry weakness that accelerated throughout the second half of 2015.  On a comparable basis, total revenue was down approximately 8 percent year on year, notwithstanding our Automotive operating segment which delivered positive year-on-year comparable growth.  We believe we have begun to see incremental positive trends in a number of our businesses, with comparable sequential revenue up approximately 6 percent into the second 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 pleased with the progress we continue to achieve.  In the second quarter we took another step in our journey, as we announced the divesture of our Standard Products business.  We continue to anticipate the transaction to close in the first quarter of 2017.  I would like to thank all of the members of the Standard Products business for their years of hard work and dedication,” said Clemmer.

Additional Information for the Second Quarter 2016:

  • In recent months the U.S. Securities and Exchange Commission (“SEC”) has increased its focus on the general use of non-GAAP financial metrics and reporting by U.S. listed companies.  In May 2016, the SEC issued new and revised Compliance & Disclosure Interpretations that relate to the reporting of non-GAAP financial measures by all U.S. listed companies.  As a result, NXP has re-evaluated its use of non-GAAP financial information, to ensure that when used in conjunction with its reported GAAP results, its non-GAAP financial information provides a clear reflection of the underlying operational performance of NXP.  Starting for the third quarter of 2016, NXP will limit its forward guidance to the following GAAP financial information; Revenue, Gross Profit, Operating Income, Financial Income and Expense, Non-Controlling Interest and Net Cash Paid for Income Taxes. In addition, NXP will limit the non-GAAP financial measures in its forward guidance and subsequent results to non-GAAP Gross Profit, non-GAAP Operating Income, and non-GAAP Financial Income and Expense.
  • On April 27, 2016, NXP redeemed $100 million aggregate principal amount of its 3.5% senior notes due 2016, which left $200 million outstanding.
  • On May 23, 2016, NXP issued and sold $850 million aggregate principal amount of 4.125% senior unsecured notes due 2021 and $900 million aggregate principal amount of 4.625% senior unsecured notes due 2023.  NXP used the net proceeds from the offering of the notes and cash on hand to repay $1,250 million aggregate principal amount of its existing secured term loan B due 2020 and $500 million aggregate principal amount of its outstanding senior secured notes due 2021
  • A loss of $23 million relative to the early extinguishment of debt was recognized in relation to the aforementioned financing activities. 
  • On June 14, 2016 NXP announced that it had reached an agreement to divest its Standard Products business to a consortium of financial investors consisting of Beijing Jianguang Asset Management Co., Ltd (“JAC Capital”) and Wise Road Capital LTD (“Wise Road Capital”). Under the terms of the agreement the consortium will pay approximately $2.75 billion for the business. The transaction is expected to close in the first quarter of 2017, pending all required regulatory approvals and employee representative consultations. 
  • During the second quarter of 2016, SSMC, NXP’s consolidated joint-venture wafer fab with TSMC, reported second quarter 2016 operating income of $37 million, EBITDA of $51 million and a closing cash balance of $555 million. 
  • During the second quarter of 2016, utilization in the combined NXP wafer-fabs averaged 91 percent.
  • During the second quarter of 2016, NXP repurchased approximately 4.33 million shares for a total cost of approximately $365 million.  Weighted average number of shares outstanding (after deduction of treasury shares) for the three month period ended July 3, 2016 was 341.3 million and as the company reported a net loss, it excludes the incremental impact of dilutive potential common shares of 8.1 million.

About NXP Semiconductors

NXP Semiconductors N.V. (NASDAQ: NXPI) enables secure connections and infrastructure for a smarter world, advancing solutions that make lives easier, better and safer. As the world leader in secure connectivity solutions for embedded applications, NXP is driving innovation in the secure connected vehicle, end-to-end security & privacy and smart connected solutions markets. Built on more than 60 years of combined experience and expertise, the company has 44,000 employees in more than 35 countries and posted revenue of $6.1 billion in 2015.