NXP Semiconductors second-quarter beats on growing NFC sales
(Reuters) - An uptick in demand for chips that enable mobile payments helped NXP Semiconductors NV (NXPI.O) weather declining sales in Europe and a decelerating PC market in the second quarter, and the chipmaker's estimates for the current quarter came in largely above Wall Street expectations.
NXP's second-quarter results topped analysts' expectations despite a decline in sales in three of its five businesses including the auto segment.
But revenue in the company's identification segment grew 21 percent to $234 million. NXP's identification business makes radio frequency (RFID) and near-field communication (NFC) chips.
Revenue from the segment is likely to jump another 10 percent to about $257.4 million in the third quarter, company officials said on a conference call with analysts.
NXP is one of the world's largest producers of NFC chips -- a technology that mobile phone makers are standardizing as the enabler for mobile wallets.
NFC technology passes encrypted information between devices at close range without contact. Instead of swiping a credit card, shoppers can wave their smartphone near a terminal, effectively turning an NFC-enabled phone into a "mobile wallet."
Google Inc (GOOG.O) has chosen NFC as the standard for mobile payments on its Android platform, and Apple Inc (AAPL.O) is widely expected to follow suit by incorporating it in the upcoming iPhone 5.
Demand from banking customers and mobile phone makers for NFC chips is expected to remain strong for the rest of the year, NXP Chief Executive Richard Clemmer said in a call with analysts.
For the third-quarter, the company, which competes with Skyworks Solutions Inc (SWKS.O), RF Micro Devices Inc (RFMD.O) and Analog Devices Inc ADI.N, projected a profit of 50 cents to 62 cents per share on revenue of $1.08 billion to $1.15 billion.
Analysts were looking for 54 cents per share on $1.11 billion in revenue, according to Thomson Reuters I/B/E/S.
NXP reported a second-quarter adjusted profit of 45 cents a share, compared with the 40 cents analysts had expected, according to Thomson Reuters I/B/E/S.
Revenue fell slightly to $1.09 billion, but topped the $1.05 billion expected by analysts.
After accounting for one-time charges related to restructuring and divestment, NXP swung to a second-quarter loss of $90 million, or 36 cents per share, compared with a profit of $84 million, or 33 cents per share, a year earlier.
The Dutch company's shares were flat at $21.85 on Tuesday morning on the Nasdaq.
(Reporting by Himank Sharma in Bangalore; Editing by Sreejiraj Eluvangal)