NXP Semiconductors (NXPI) Stock: Up On Qualcomm Breakup Fee


NXP Semiconductors NV NXPI Stock NewsInvestors are watching NXP Semiconductors NV (NASDAQ: NXPI) incredibly closely this morning after the company reported its earnings. While earnings were a hit, the gains are largely the result of the financial benefits the company saw during the quarter as the result of the Qualcomm (QCOM) breakup fee. Today, we’ll talk about:

  • The NXPI news;
  • what we’re seeing from the stock; and
  • what we’ll be watching for ahead.

NXPI Is Climbing: Here’s Why

As mentioned above, NXP Semiconductors is having a great start to the trading session in the pre-market hours this morning after reporting earnings and showing a large benefit from the Qualcomm breakup. Here’s what we saw from the report:

  • Revenue – In terms of revenue, NXPI did overwhelmingly well. During the quarter, the company produced revenue of $2.445 billion. That figure was up 2% year over year and 7% quarter over quarter.
  • Profits – In terms of profit, the company also produced great results. During the quarter, net profit came in at $1.82 billion, up from $108 million a year ago. This is where that Qualcomm breakup fee comes in. Ultimately, net profits were so high as they included proceeds from the $2 billion break-up fee the company got from Qualcomm after the merger between the two was not closed.
  • Adjusted Profits – On an adjusted basis, profits came to $733 million. This figure was down slightly as the result of higher R&D spending. Nonetheless, margins increased to 30% from 27% in the last quarter.

All in all, the earnings report was positive, largely thanks to the Qualcomm breakup fee. Now, the question is how the company will do moving forward. With larger margins, the company may produce more positivity heading into the fourth quarter.

What We’re Seeing From The Stock 

Earnings season is one of my favorite seasons of the year, and it happens four times per year. The bottom line is that earnings provide investors with the most up-to-date financial information available and have the potential to move the market in a big way. In the case of NXP Semiconductors, the earnings release was positive. So, it’s not surprising to see that excited investors are pushing the stock toward the top. At the moment (9:25), NXPI is trading at $80.25 per share after a gain of $5.26 per share or 7.01% thus far today.

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will continue to keep a close eye on NXPI. In particular, we’re interested in following the story surrounding the company’s fourth quarter performance and seeing if the company can continue to see gains in margins. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!

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