NXP Semiconductors reports Q1 2011 results

SINGAPORE: NXP Semiconductors N.V. reported financial results for the first quarter 2011, ended April 3, 2011, and provided guidance for the second quarter 2011.

“NXP delivered better than anticipated top-line revenue during the first quarter as nearly all of our focus segments outperformed our original expectations,” said Richard Clemmer, NXP CEO. “Our quarterly performance successfully demonstrates NXP’s strategy to focus on the faster growing High Performance Mixed Signal market, and to opportunistically service the broad-based Standard Products market. The success of our strategy is especially clear when compared to the normal seasonal slowdown in the broader semiconductor industry and the seasonal performance of the mixed signal served market during the first quarter.

“We experienced continued margin expansion as non-GAAP gross margin increased to nearly 48 percent, a 22 percent improvement in non-GAAP gross profit versus the year ago period. Simultaneously we held our total expenses steady, resulting in non-GAAP operating margin of 21 percent, a 76 percent improvement in non-GAAP operating profit from the year ago period.

“Within our focused High Performance Mixed Signal segment, revenue grew 7 percent year-on-year, while segment margins continue to trend toward our long term model. During the first quarter, our High Performance Mixed Signal nonGAAP operating margin was 24 percent, a 54 percent increase in non-GAAP operating profit from the year ago period.

“We experienced significant growth within our Identification segment, which was up 17 percent sequentially, and up a full 40 percent versus the year ago period. Furthermore we experienced solid growth in our Wireless Infrastructure, Lighting and Infrastructure segment, off-set by seasonal weakness in our Mobile, Consumer and Computing segments and a very slight impact relating to the disaster in Japan on our Automotive segment,” Clemmer said.

Q1 2011 GAAP results
Product Revenue was $979 million, an increase of 9.5 percent from the $894 million reported in the first quarter of 2010, and an increase of 4.4 percent from the $938 million reported in the fourth quarter of 2010. Product Revenue from continuing operations is the combination of revenue from High Performance Mixed Signal (HPMS) and Standard Products segments.

Total revenue from continuing operations was $1,082 million, a decrease of less than 1.0 percent 2 from the $1,085 million reported in first quarter of 2010 and an increase of less than 1.0 percent from the $1,078 million reported in the fourth quarter of 2010.
Revenue attributable to the combination of the Manufacturing Operations and the Corporate and Other segments was $103 million, a 46.1 percent decrease from the $191 million reported in the first quarter of 2010, and a 26.4 percent decrease from the $140 million reported in the fourth quarter of 2010.

Included in the total revenue for the first quarter of 2010 was $47 million related to our divested Home segment and $26 million related to the divested NuTune business.
Ongoing support for the divested Home business is currently included in our Manufacturing Operations segment.

Gross profit from continuing operations for the first quarter of 2011 was $506 million, or 46.8 percent of revenue, as compared to $406 million, or 37.4 percent of revenue reported in the first quarter of 2010. This compares to the $495 million, or 45.9 percent of revenue reported in the fourth quarter 2010.

Operating income from continuing operations for the first quarter of 2011 was $108 million, or 10.0 percent of revenue, as compared to a loss of $15 million reported in the first quarter of 2010, or loss of 1.4 percent of revenue. This compares to an operating income of $106 million, or 9.8 percent of revenue as reported in the fourth quarter of 2010.

Net income for the first quarter of 2011 was $187 million, or $0.73 per share (diluted). This compares to a net loss of $345 million, or a loss of $1.60 per share reported in the first quarter of 2010, and net loss of $118 million or a loss of $0.47 per share reported in the fourth quarter of 2010.

All current and all prior period financial figures have been restated to reflect the previously announced divesture of NXP’s Sound Solutions business. The historical results of the Sound Solutions business are treated as a discontinued business in NXP’s financial statements.

Q1 2011 non-GAAP results
Product Revenue was $979 million, an increase of 9.5 percent from the $894 million reported in the first quarter of 2010, and an increase of 4.4 percent from the $938 million reported in the fourth quarter of 2010. Revenue from continuing operations was $1,082 million, a decrease of less than 1.0 percent from the $1,085 million reported in first quarter of 2010 and an increase of less than 1.0 percent from the $1,078 million reported in the fourth quarter of 2010.

Non-GAAP gross profit from continuing operations was $517 million, or 47.8 percent of revenue, an increase from the $423 million, or 39.0 percent of revenue reported in the first quarter of 2010. This compares to $508 million, or 47.1 percent of revenue reported in the fourth quarter of 2010.

Non-GAAP operating income from continuing operations was $223 million, or 20.6 percent of revenue, an increase from the $127 million, or 11.7 percent of revenue, reported in the first quarter of 2010. This compares to the non-GAAP operating income of $208 million, or 19.3 percent of revenue reported in the fourth quarter of 2010.

Non-GAAP net income was $117 million, or $0.46 per share (diluted). This compares to non-GAAP net income of $35 million, or $0.16 per share reported in the first quarter of 2010, and a profit of $95 million or $0.37 per share (diluted) reported in the fourth quarter of 2010.