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Revenue in the period will be $3.05 billion to $3.25 billion, the Dutch company said in a statement on Monday. Though the midpoint of that range topped the average Wall Street estimate, some analysts predicted a number above $3.3 billion, according to data compiled by Bloomberg.
The outlook suggests that NXP is still contending with a turbulent industry. The company is heavily reliant on the automotive sector, which accounts for more than half of its revenue and has been hit by US President Donald Trump's tariff campaign. The levies have upended global supply chains and triggered uncertainty over customer orders.
Bernstein analyst Stacy Rasgon described the report as 'mostly fine,' but said it didn't quite match the 'whisper' numbers that some were hoping for.
The stock fell about 5% in extended trading. It had closed at $228.27 in New York on Monday, leaving it up almost 10% for the year.
NXP revenue fell 6% to $2.93 billion in the second quarter, roughly in line with analysts' estimates, according to data compiled by Bloomberg. The midpoint of its third-quarter forecast suggests that sales will decline 3% from a year earlier.
Third-quarter guidance 'may have disappointed the market,' Bloomberg Intelligence analyst Ken Hui said in a note. But it's consistent with his expectation that the company will keep inventories below the long-term target as NXP copes with 'an uncertain market backdrop.'
Chief Executive Officer Kurt Sievers struck an upbeat tone about the current quarter, saying it would reflect 'improvement in NXP's core end markets.' Earnings will be $2.89 to $3.30 a share, excluding some items, the company said. Analysts had projected $3.06 a share.
Second-quarter earnings amounted to $2.72 a share on that basis, beating the $2.68 estimate.
The CEO had said during the April earnings call that the second quarter was expected to mark 'a bit of a turning point,' as customer orders stabilized. Like its peers, NXP also has been struggling with a stubborn glut of chips that help power electric cars and manufacturing operations. This oversupply has weighed down sales for much of the industry for more than 18 months as demand for electric vehicles outside of China has fallen.
Weaker demand in the auto and industrial segments could be a drag on sales for NXP and rivals Infineon Technologies AG and STMicroelectronics NV. Last week, Renault SA slashed its guidance for this year's operating margins because of intensifying competition and a decline in the auto market. Stellantis NV on Monday reported a surprise first-half net loss.
Bloomberg Intelligence's Hui said in a note last week that automotive chipmakers 'may see stronger pricing pressure and the end of tariff-beating restocking demand from European customers after Renault cut its outlook' due to strong competition and declines in the vehicle market.
Additionally, industrial revenue recovery 'may be unsustainable after factory-automation leader Yaskawa reported 1Q orders that were weaker than expectations, particularly in China, and cut full-year forecasts to include tariff risks,' Hui wrote earlier this month.
--With assistance from Ian King.
(Updates with analyst commentary starting in fourth paragraph.)
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