NXP Semiconductors NV (NASDAQ:NXPI) reported strong preliminary results for the third quarter. The company reported preliminary sales of $2.267 billion, which is above the $2 billion guidance midpoint.
Gross profit was found to be $1.090 billion, compared to $1.135 billion in the prior-year quarter. Operating income proved to be $32 millon, much lower than the $586 million in the prior-year quarter.
Said CEO Kurt Sievers, "Today, based on preliminary financial information, we are pleased to announce a significant improvement in our outlook for the third quarter of 2020. Relative to the mid-point of our guidance, we experienced material improvement in demand across all end markets, but particularly in the Automotive and Mobile end markets. Additionally, demand improved in both our direct and distribution channels.
"The business environment has improved at a faster than anticipated pace, driving a broad-based increase in revenue, which also enabled higher gross margin. Given the improved outlook, we increased operating expenses in relation to non-executive variable incentive compensation, which taken together, resulted in operating profit margin substantially above guidance.”
NXP is currently in its quiet period ahead of its third quarter 2020 earnings call, and will not host a call to provide additional commentary regarding this preannouncement.
The company will release the final financial results for the third quarter 2020 and its guidance for the fourth quarter of 2020 after the close of normal trading on Monday, October 26.
NXPI shares leaped $6.55, or 4.9%, to $141.38.
