NXP 3Q2010 Revenue Up 25%

NXP Semiconductors N.V. has reported third quarter revenues of $1.213 billion, up 25.2 percent from the same peroiod last year, and an increase of 1.1 percent compared to prior quarter.

In addition to market recovery, revenue increased from last year due to strength in NXP’s High Performance Mixed Signal segment, which grew faster than the market and faster than our Standard Products segment.

Gross profit was $519 million, or 42.8 percent of revenue. This compares to $370 million, or 34.4 percent of revenue a year ago and $482 million, or 40.1 percent of revenue in prior quarter. Gross margin improvements from last year resulted primarily from our Redesign Program, higher factory utilization and a richer product mix due to successes in High Performance Mixed Signal. Compared to prior quarter, gross margin improvements resulted primarily from our Redesign Program and higher factory utilization.

Operating expenses were $305 million, compared to $323 million a year ago and $299 million in prior quarter. Compared to the prior quarter, we increased R&D investments in High Performance Mixed Signal while at the same time reducing G&A expense primarily due to the Redesign Program.

Operating income was $211 million, or 17.4 percent of revenue. This compares to $49 million, or 4.5 percent of revenue a year ago, and $185 million, or 15.4 percent a year ago. This was the sixth consecutive quarter of significant improvement in High Performance Mixed Signal operating margins.

“The third quarter represented our sixth consecutive quarter of growth and significant operational improvement, as we continue to execute on our High Performance Mixed Signal solutions strategy,” said Richard Clemmer, NXP Chief Executive Officer. “Compared to the year ago quarter, revenue was up 25 percent on a comparable basis and NXP achieved 17.4 percent non-GAAP operating margin as we continued to see good results from our Redesign Program.

“Our success in winning new designs in our focus areas contributed to market share gains in High Performance Mixed Signal over the past year. We’ve seen particular success in identification, automotive entertainment and networking, microcontrollers, base stations and lighting markets. Our HPMS business represents 70 percent of NXP Product Revenue and is now operating at 56.5 percent non-GAAP gross margin and 23.1 percent non-GAAP operating margin, with room for further margin expansion. And we continue to see growth in new design wins in HPMS as customers turn to NXP to help them optimize their electronic end equipment. Product Revenue is the combination of our HPMS and Standard Products segments.

“We also made significant progress during the quarter in improving NXP’s capital structure. We completed an IPO with $450 million in net proceeds as well as a $1 billion bond offering which extended debt maturities to 2018. We generated $158 million in cash from operations during the quarter and since the end of last year, we have reduced net debt by $555 million,” Clemmer said.

NXP Semiconductors

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