Why Is NXPI Stock Down Over 6% Premarket Today?

NXP Semiconductors forecast quarterly operating profit below expectations, overshadowing a strong showing in Q3.

• NXP’s third-quarter results beat analyst expectations.
• The automotive chipmaker authorized a $5 billion share buyback.
• Retail sentiment for NXP shifted to ‘bullish’ from ‘bearish.’ 

NXP Semiconductors NV’s (NXP) stock tumbled 6.5% in early premarket trading on Wednesday after the automotive chipmaker forecast quarterly profit below analyst expectations.

The Eindhoven, Netherlands-based company forecast fourth-quarter operating income of $1.374 billion to $1.442 billion on an adjusted basis, below the FactSet consensus of $1.44 billion.

Revenue forecast of $3.85 billion, plus or minus $100 million, came largely in line with the LSEG consensus of $3.86 billion. The forecast overshadowed an otherwise strong Q3 report and the announcement of a fresh buyback authorization.

NXP Q3 Performance

Revenue rose 19% to $3.79 billion, beating analyst expectations of $3.76 billion from FactSet. Adjusted profit was $4.20 per share, up from $3.11 a year earlier, and above the expected $4.12.

“Our performance was driven by accelerating contributions from our company-specific growth drivers in automotive and industrial as well as continued momentum in data center infrastructure,” CEO Rafael Sotomayor said in a statement.

“Looking ahead, we see significant opportunities as software-defined vehicles drive increasing demand for our next-generation solutions, while data center infrastructure and Trusted Physical AI applications create new vectors for long-term growth.”

NXP, which makes chips for automotive systems, industrial equipment, mobile devices, and communications infrastructure, said that it had authorized a new $5 billion share repurchase plan.

Retail View On NXPI

On Stocktwits, the retail sentiment for NXPI shifted to ‘bullish’ from ‘bearish’ as of early Wednesday.

“$NXPI $PX Looks like another hit job by the hedge funds here. That is how they make their money, smash it down on great earnings, get retail to sell and then slowly send it back up,” said a trader.

Hard disk drive maker Seagate Technology (STX) reported better-than-expected results and issued a strong forecast, but its shares fell 6%.

Another trader simply wrote, “$NXPI thanks for dip.” As of the last close, NXPI stock had gained 18.3% year to date.

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