NXP Semiconductors Reports 4Q, Full Year 2017 Results

NXP Semiconductors N.V. reported financial results for the fourth quarter and full year ended Dec. 31, 2017.
 
NXP delivered fourth quarter revenue of $2.46 billion, an increase of approximately 1% year on year, and an increase of 3% as compared to the prior quarter, with the annual period comparison impacted by the divestment of the Standard Products business during the first quarter of 2017. HPMS segment revenue was $2.35 billion, an increase of 14% year on year, and an increase of 3% on a sequential basis.
 
Full year revenue was $9.26 billion, a decline of approximately 3% year on year, with the annual period comparison impacted by the previously noted divestment of the Standard Products business. Full year HPMS segment revenue was $8.75 billion, an increase of 8% year on year.
 
Within the Automotive group, fourth quarter revenue was $970 million, up 12% year on year, with auto MCU, advanced analog and infotainment all contributing to the year on year growth. For the full year 2017, Automotive group revenue was $3.76 billion, up 11% year on year.
 
Within the Secure Connected Devices group, fourth quarter revenue was $745 million, up 31% year on year driven by demand for general purpose, multi-market MCU and high performance application processor products, in addition to seasonal strength for mobile transaction products. For the full year 2017, Secure Connected Device group revenue was $2.59 billion, up 21% year on year.
 
In the Secure Interface and Infrastructure group, fourth quarter revenue was $497 million, up 3% year on year, driven by growth in Interface product revenue, offset by year-on-year revenue declines within the Digital Networking and RF-based product groups. For the full year 2017, Secure Interface and Infrastructure group revenue was $1.87 billion, up 3% year on year.
 
Lastly, in Secure Identification Solutions group, fourth quarter revenue was $136 million, down 7% year on year due to ongoing weakness in the global bank-card and government identification markets, offset by positive trends in the mobility and retail markets. For the full year 2017, Secure Identification Solutions group revenue was $523 million, down 29% year on year.
 
“We continue to believe that our transaction with Qualcomm is critical to supporting our customers’ long-term requirements in both autonomous driving and secure IoT given our complimentary product portfolios, Qualcomm’s strength in connectivity and high end processing and the difficulty of organically building leadership solutions,” said Richard Clemmer, NXP CEO.
 
“In the fourth quarter, our GAAP operating margin was 8.6%, a 150-basis point improvement from the fourth quarter of 2016 due to the profit fall-through associated with the year on year growth of our HPMS segment, combined with the divestment of our Standard Products business which occurred in early 2017. Our fourth quarter non-GAAP operating margin was 31.1%, representing a 180-basis point improvement compared to the fourth quarter of 2016 and a 30-basis point improvement sequentially. And finally, due to flat gross debt and improved cash generation in the quarter, our overall financial leverage was reduced to 0.96x,” said Peter Kelly, NXP CFO.