D-Wave Quantum falls nearly 3% as earnings miss overshadows revenue beat
On Tuesday, Bernstein analysts maintained a Market Perform rating on NXP Semiconductors NV (NASDAQ:NXPI) with a steady price target of $225.00. The semiconductor company’s fourth-quarter 2024 results closely matched consensus estimates regarding revenue, gross margins, and earnings per share (EPS). NXP reported revenues of $3,111 million, a gross margin of 57.5%, and EPS of $3.18, compared to the Street’s expectations of $3,100 million in revenues, a 57.5% gross margin, and EPS of $3.15. According to InvestingPro data, NXP maintains strong financial health with a GOOD overall score, though 19 analysts have recently revised their earnings expectations downward for the upcoming period.
The company’s automotive segment outperformed expectations, while the mobile division met predictions. However, there were underperformances in the industrial/IoT and communications segments. Channel inventory remained relatively unchanged quarter over quarter at approximately 8 weeks, but on-book inventories saw an increase. Despite these results aligning with the general anticipations based on the performance of analog peers, NXP’s guidance for the first quarter fell short of analyst projections. The company forecasted revenues of $2,825 million, a gross margin of 56.3%, and EPS of $2.59, which is below the Street’s anticipated $2,920 million in revenues, 57.0% gross margin, and $2.69 EPS. Trading near its 52-week low with a P/E ratio of 19.37, InvestingPro analysis suggests the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report.
Bernstein’s analysts suggest that the focus should now shift to several key areas: the factors influencing gross margin heading into the first quarter and throughout 2025, given the company’s gross margin guidance fell below their new model range; trends within core automotive and industrial segments; any qualitative insights into the second quarter’s outlook, including considerations of tariff risks; the reasons behind the apparent operational expenditure cut and its implications for future expectations; and distribution channel trends along with any plans for further increases. InvestingPro subscribers can access detailed financial health metrics, including cash flow and profitability scores, along with 7 additional exclusive ProTips that provide deeper insights into NXP’s market position and future potential.
In other recent news, NXP Semiconductors has been in the spotlight with recent developments. The company is expected to report fourth-quarter revenue that aligns with or falls slightly below Stifel’s estimate of $3.10 billion. The company’s financial performance is closely tied to the broader trends affecting the Industrial and Automotive sectors, according to Stifel’s analysis.
NXP Semiconductors has secured a €1 billion loan from the European Investment Bank (EIB) to bolster its tech research and development initiatives across five European Union member states. Additionally, the company has secured a €360 million loan from the EIB to advance semiconductor research and innovation in Europe.
The company has also announced the acquisition of Aviva (LON:AV) Links, a specialist in automotive connectivity solutions, for $242.5 million. This acquisition aims to enhance NXP’s portfolio, particularly in the realm of advanced driver-assistance systems and in-vehicle infotainment.
In terms of analyst ratings, Wells Fargo (NYSE:WFC) initiated coverage of NXP Semiconductors with an Overweight rating, while Loop Capital also initiated coverage with a Buy rating. However, Citi analyst Christopher Danely maintained a Sell rating on the stock.
NXP Semiconductors recently declared an interim dividend of $1.014 per ordinary share for the fourth quarter of 2024. Despite a year-on-year decline, the company reported a slight sequential increase in revenue, with its third-quarter revenue reaching $3.25 billion. These are the recent developments for NXP Semiconductors.
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