Shares of NXP Semiconductors rose Tuesday after the Dutch chipmaker beat Wall Street's targets for the fourth quarter and increased its quarterly dividend 50%. NXP kicked off a busy earnings week for semiconductor stocks.
Netherlands-based NXP late Monday said it earned an adjusted $3.20 a share on sales of $3.04 billion in the December quarter. Analysts had expected adjusted earnings of $3.01 a share on sales of $3 billion, according to FactSet. On a year-over-year basis, NXP earnings increased 49% while sales grew 21%.
The chipmaker also increased its quarterly cash dividend 50% to 84.5 cents a share. Plus, it announced a new $2 billion share repurchase program. The new stock buyback plan is in addition to the $1.35 billion in repurchase authorizations still remaining on its prior plan.
For the current quarter, NXP expects to generate $3.1 billion in revenue vs. Wall Street's target of $2.96 billion. Its guidance implied adjusted earnings per share of $3.18 vs. the consensus estimate of $2.81 for the March quarter.
NXPI Stock Rises After Report
On the stock market today, NXPI stock rose 1.3% to close at 208.20. During the regular session Monday, NXPI stock jumped 8.4% to 205.44 during a big up day for the overall market.
NXP makes chips for automotive, industrial, mobile, Internet of Things, and communication infrastructure markets.
Cirrus Logic Sinks On Longer-Term Outlook
Elsewhere among semiconductor stocks, audio-chip maker Cirrus Logic late Monday delivered a beat-and-raise report. But its guidance one quarter out worried investors.
Austin, Texas-based Cirrus Logic earned an adjusted $2.54 a share on sales of $548.3 million in its fiscal third quarter ended Dec. 25. Analysts had expected earnings of $2.14 a share on sales of $510 million, FactSet said. On a year-over-year basis, earnings rose 19% while sales climbed 13%.
For the current quarter, it expects to generate sales of $400 million to $440 million. The midpoint of $420 million is well above analyst expectations of $354 million for the March quarter.
But Cirrus Logic signaled a slowdown in the June quarter as some orders are being pulled into the March quarter. It guided to sales falling 30% sequentially and rising just 2% to 5% year over year in the June quarter. Business from Apple accounted for 82% of Cirrus Logic revenue in the December quarter.
On Tuesday, CRUS stock fell 7.3% to close at 82.94.
CRUS stock ranks No. 14 out of 31 semiconductor stocks in IBD's fabless semiconductor industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 88 out of 99. NXPI stock ranks No. 13 in the group.
Semiconductor Stocks Perk Up
Three semiconductor stocks posted earnings reports on Tuesday. Allegro MicroSystems and Entegris announced results before the market open. Advanced Micro Devices delivered a blowout fourth-quarter report after the close.
Allegro and Entegris each delivered beat-and-raise reports. Allegro stock advanced 1.1% to 28.69 on Tuesday while Entegris climbed 7.3% to 128.44.
Manchester, N.H.-based Allegro earned an adjusted 19 cents a share on sales of $186.6 million in its fiscal third quarter ended Dec. 24. Analysts had expected earnings of 18 cents a share on sales of $182.7 million. On year-over-year basis, Allegro earnings increased 46% while sales rose 13%.
For the current quarter, Allegro expects to earn an adjusted 21 cents a share on sales of $195 million. That's based on the midpoint of its outlook. Wall Street had been modeling earnings of 19 cents a share on sales of $191.9 million.
Allegro makes power and sensing chips for automotive, industrial, and other applications.
Entegris Tops Wall Street's Views
Chip gear supplier Entegris earned an adjusted 96 cents a share on sales of $635 million in the fourth quarter. Analysts were looking for earnings of 89 cents a share on sales of $593 million. On a year-over-year basis, Entegris earnings jumped 35% while sales climbed 23%.
For the first quarter, the Billerica, Mass.-based company expects to earn an adjusted 99 cents a share on sales of $640 million, based on the midpoint of its guidance. Wall Street had forecast earnings of 89 cents a share on sales of $599 million.
Semiconductor Stocks Peaking?
On Monday, Jefferies analyst Mark Lipacis said investors should be cautious when it comes to chip stocks. In a note to clients, he said semiconductor stocks "have entered the peaking process."
He based his conclusion on an analysis of previous peaks of semiconductor stocks in 2014-15 and 2017-18. Those prior two cycles were characterized by volatile trading with multiple mini-peaks and troughs. The peaking process typically lasts about six months before semiconductor stocks roll over, he said.
However, Lipacis suggested seven semiconductor stocks that look attractive after recent sell-offs. They include AMD, Lam Research, Marvell Technology, Microchip Technology, Nvidia, NXP and ON Semiconductor.
Six semiconductor stocks, including Qualcomm, have earnings reports scheduled for Wednesday.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
