01—Abstract
Summary
Summary of the 10-K filed February 27, 2020. Cited figures are marked; the original filing is the authoritative source.
NXP Semiconductors N.V. reported $8.877 billiona in revenue for the fiscal year 2019, a decrease from $9.407 billion in 2018, reflecting a challenging semiconductor industry environment, particularly impacted by trade tensions.
The company's strategic focus remains on its core end-markets: Automotive, Industrial & IoT, Mobile, and Communication Infrastructure. Despite the revenue dip, NXP saw an improvement in its gross profit margin to 52.0%b in 2019, up from 51.6% in 2018, attributed to a favorable market and customer mix and cost controls. The company also continued to generate strong operating cash flows, utilizing them for dividends and share repurchases, demonstrating a commitment to returning value to shareholders.
The acquisition of Marvell's wireless connectivity business in December 2019 is expected to bolster NXP's product portfolio and drive future growth. Key financial highlights include a decrease in revenue, a slight improvement in gross margin, and consistent operating cash flow generation.
The company maintained a strong cash position, providing liquidity for ongoing operations and strategic investments. Investors should note the cyclical nature of the semiconductor industry and NXP's efforts to navigate these cycles through innovation and strategic acquisitions.
02—Key points
Key Highlights
- Revenue for 2019 was $8.877 billion, a 5.6% decrease from $9.407 billion in 2018, impacted by challenging industry conditions and geopolitical tensions.
- Gross profit margin improved slightly to 52.0% in 2019 from 51.6% in 2018, driven by a favorable end-market mix and cost management.
- Operating expenses decreased by 3.4% to $4.002 billion in 2019, primarily due to lower R&D and SG&A costs.
- The company generated $2.373 billion in cash flow from operating activities in 2019.
- NXP completed the acquisition of Marvell's Wireless WiFi Connectivity Business Unit and Bluetooth technology portfolio for $1.7 billion in December 2019.
- Dividends paid to common stockholders increased to $351 million in 2019 from $147 million in 2018, reflecting a 50% increase in the quarterly dividend announced in August 2019.
- The company repurchased approximately $1.4 billion of its common stock in 2019 as part of its share repurchase program.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2019, NXP Semiconductors N.V. kept $0.03.
- Revenue$8.88B100.0%
- Cost of revenue−$4.26B48.0%
- Gross profit$4.62B52.0%
- Operating costs−$3.98B44.8%
- Operating income$641.0M7.2%
- Interest, other & tax−$398.0M4.5%
- Net income$243.0M2.7%
Where FY2019 revenue went
$8.88B- Cost of revenue: $4.26B, 48% of revenue
- R&D: $1.64B, 19% of revenue
- Other operating costs: $1.41B, 16% of revenue
- Net income: $243.0M, 2.7% of revenue
- SG&A: $924.0M, 10% of revenue
- Interest, other & tax: $398.0M, 4.5% of revenue
Kept 2.7% as net incomeNet income $243.0M · 2.7%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2019filed February 27, 2020Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $8.88B$9.41B | −5.6% |
| Cost of Revenue | $4.26B$4.56B | −6.5% |
| Gross Profit | $4.62B$4.85B | −4.8% |
| R&D Expenses | $1.64B$1.70B | −3.4% |
| SG&A Expenses | $924.00M$993.00M | −6.9% |
| Operating Expenses | $4.00B$4.14B | −3.4% |
| Operating Income | $641.00M$2.71B | −76.3% |
| Interest Expense | $370.00M$273.00M | +35.5% |
| Net Income | $243.00M$2.21B | −89.0% |
| EPS (Basic) | $0.86$6.78 | −87.3% |
| EPS (Diluted) | $0.85$6.72 | −87.4% |
| Shares Outstanding (Basic) | 282.06M325.78M | −13.4% |
| Shares Outstanding (Diluted) | 285.91M328.61M | −13.0% |
05—Questions
Frequently Asked Questions
What was NXP's revenue performance in 2019, and what factors influenced it?
NXP reported revenue of $8.877 billion in 2019, a decrease of 5.6% from $9.407 billion in 2018. This decline was primarily attributed to a challenging semiconductor industry environment, lower demand, particularly in the Automotive and Industrial & IoT segments, and the impact of trade tensions between the United States and China, which affected sales, especially in Greater China.
How did NXP's profitability fare in 2019, and what contributed to it?
Despite the revenue decrease, NXP saw a slight improvement in its gross profit margin to 52.0% in 2019, up from 51.6% in 2018. This was driven by a more favorable end-market and customer mix, alongside benefits from manufacturing cost controls. Operating expenses also decreased by 3.4% due to lower R&D and SG&A costs.
What significant strategic actions did NXP take in 2019?
In December 2019, NXP completed a significant acquisition of Marvell Technology Group Ltd.'s Wireless WiFi Connectivity Business Unit, Bluetooth technology portfolio, and related assets for $1.7 billion. This acquisition is expected to strengthen NXP's offerings in key markets like Industrial & IoT and Automotive. Additionally, the company announced a 50% increase in its quarterly dividend and continued its share repurchase program, returning capital to shareholders.
How is NXP positioned regarding liquidity and debt?
NXP maintained a strong liquidity position with $1.045 billion in cash and cash equivalents at the end of 2019, along with access to a $1.5 billion revolving credit facility. Total debt remained relatively stable at approximately $7.365 billion. The company's operating cash flows are robust, supporting its liquidity and financial obligations.
06—Continue