The News: NXP Semiconductor recently announced its fourth quarter and end of year earnings ending on December 31, 2022. The company grew its fourth quarter earnings by 9 percent beating analyst estimates versus the prior year fourth quarter and 19 percent for the full year 2022. See the full earnings release from NXP Semiconductors here.
NXP Semiconductor Q4 2022 Revenues, up 9 Percent YoY – and Thoughts on What’s Ahead for the Semiconductor Manufacturer
Analyst Take: For calendar year 2022, NXP Semiconductor has weathered the macroeconomic turbulence that has plagued others in the semiconductor industry in recent months, which is illustrated by the company’s most recent quarter and full year revenues that increased 9 percent and 19 percent, respectively. Also, from 2019 to 2022, the company has grown its revenues from $8.9 billion in 2019 to $13.2 billion in 2022, a 14 percent compound annual growth rate. During the same period, the company has also managed to grow its GAAP and non-GAAP gross profit margins 17 percent which is impressive.
Here are NXP Semiconductor revenues for Q4 2022
- Q4 2022 revenues were $3.3 billion versus $3.0 billion in Q4 2021, up 9 percent year-over-year.
- Q4 2022 non-GAAP gross profit was $1.9 billion versus $1.7 billion in Q4 2021, up 10 percent year-over-year.
- Q4 2022 non-GAAP gross margins were 58.0 percent versus 57.3 percent year-over-year.
- Q4 2022 non-GAAP operating margins were 36.5 percent versus 34.9 percent year-over-year.
NXP Semiconductor Revenue by Segment for Q4 2022
- Q4 2022 Automotive grew 17 percent year-over-year.
- Q4 2022 Industrial & IoT declined 8 percent year-over-year.
- Q4 2022 Mobile grew 9 percent year-over-year.
- Q4 2022 Communications & Infrastructure & other grew 8 percent year-over-year.
From a product segment perspective, Automotive, Mobile and Communications, & Infrastructure all exhibited growth for the quarter, except for Industrial & IoT segment. Leading growth, the Automotive segment, which represented 52 percent of revenues in calendar 2022, exhibited strong performance benefitting from items such as better pricing environment buoyed by OEMs prioritizing premium-based xEV vehicles in a narrow supply environment. The company mentioned growth drivers for the segment included 77-gigahertz radar electrification and the S32 domain zonal processors. In their earnings reporting, NXP mentioned they are experiencing customer excitement for its S32 domain and zonal processor family, which enables the software-defined vehicle.
The company’s Mobile division accounted for 12 percent of revenues and grew 9 percent year-over-year. Although the segment exhibited growth, it was below the company’s expected growth range due to the weakness in the overall smartphone market that has been plagued by economic malaise and higher inflation impacting consumer spending. The Communications & Infrastructure segment, which represented 15 percent of 2022 revenues, grew 8 percent year-over-year and was in line with its revenue growth range for RF power amplifiers. The company also indicated that it is greatly benefitting from the industry transition to gallium nitride from LDMOS technology with demand continuing to outstrip supply. NXP’s Industrial & IoT segment accounted for 21 percent of company revenues for 2022 and declined 8 percent year-over-year, which was better than its guidance. The company indicated that it expects strength in its core industrial submarkets with its products being a key enabler of critical infrastructure to be more efficient.
NXP Semiconductor Guidance for Q1 2023
For the first quarter of 2023, the company issued its GAAP and non-GAAP revenue guidance to the street. The company expects its low, mid, and high year-over-year revenue guidance to be $2.9 billion (-8 percent YoY), $3.0 billion (-4 percent YoY) or $3.1 billion (-1 percent YoY).
Wrapping it up, NXP Semiconductor had a good quarter lifted by solid demand in its Automotive segment, which grew 17 percent year-over-year, while other units were impacted by softening demand in areas such as Android smartphones. NXP’s guidance was more subdued than many expected, based on the company’s historical revenue growth coupled with margin accretion, it makes sense the company should continue to perform well in the future regardless of more turbulent environment in 2023.
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