© Reuters. FILE PHOTO: Attendees stand outside the NXP booth as they wait for the start of the second day of CES 2023, an annual consumer electronics trade show, in Las Vegas, Nevada, U.S. January 6, 2023. REUTERS/Steve Marcus
(Reuters) – Chipmaker NXP Semiconductors (NASDAQ:) forecast third-quarter revenue and profit above Wall Street targets on Monday, betting that demand from automakers ramping up production will cushion the hit from a weak consumer electronics market.
Growing electrification of cars and the use of advanced driver-assistance systems have kept demand for automotive chips steady, helping NXP, which made over half of its revenue from that sector last year.
Automakers had struggled to get their hands on key components during the pandemic, but are now finding supply more readily available after global chip shortages eased.
Nasdaq-listed shares of the Eindhoven, Netherlands-based company rose 1.5% in trading after the bell.
“We see continued strength in our automotive, core-industrial and communications infrastructure businesses,” said CEO Kurt Sievers. Revenue in those segments rose in the second quarter on a sequential basis.
Still, a downturn in the rest of the semiconductor industry after a drastic drop in demand for goods from TVs to smartphones has pressured all chipmakers, including NXP.
Moreover, the United States’ curbs on exports to China have continued to escalate, with both sides bringing in new restrictions.
NXP, which had earlier said it expects no material impact from China’s export curbs on certain gallium and germanium products, makes about 36% of its revenue from the region and uses the metals in chips for the auto and communications sectors.
On an adjusted basis, the company forecast current-quarter revenue in the range of $3.30 billion to $3.50 billion, compared to analysts’ estimates of $3.31 billion, per Refinitiv data.
It forecast adjusted profit per share between $3.39 and $3.82 for the same period. Analysts expected $3.43 per share.
Revenue in the quarter ended July 2 was $3.30 billion, compared to estimates of $3.21 billion.
Excluding items, NXP earned $3.43 per share, beating estimates of $3.29.
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