Chipmaker NXP Semiconductors forecast fourth-quarter profit above Wall Street targets on Monday, expecting a resilient automotive market and stable industrial demand to offset weakness in other key markets.
To protect its profits, the company has also been passing on rising costs to its customers, excluding distributors.
NXP in September said automotive demand was “pretty good” across all its markets, including China, which contributes about 30% to the chipmaker’s total revenue.
Strong iPhone demand is also a positive sign for NXP, which makes a near-field communications chip that goes into smartphones to help with mobile payments and other functions. Analysts believe Apple is a key NXP customer.
Revenue at is mobile segment fell 8% on a year-on-year basis in the quarter ended Oct. 1, but it jumped 33% sequentially, indicating a recovery in smartphone demand.
However, NXP CEO Kurt Sievers said the company’s communication infrastructure business performed “slightly below expectations” in the third quarter.
While revenue at its largest segment, automotive, grew 5% in the third quarter, analysts worry chip demand will soon sap after months of hoarding and slowing EV demand.
The company forecast adjusted current quarter revenue in the range of USD 3.30 billion and USD 3.50 billion, compared to analysts’ estimate of USD 3.43 billion, per LSEG data.
It forecast adjusted profit per share between USD 3.44 and USD 3.86 for the same period. Analysts expect USD 3.61 per share.
Revenue in the third quarter was USD 3.43 billion, compared with estimates of USD 3.40 billion.
Excluding items, NXP earned USD 3.70 per share, beating estimates of USD 3.59.
Nasdaq-listed shares of the Eindhoven, Netherlands-based company rose about 1% in trading after the bell.
