(Bloomberg) — NXP Semiconductors NV shares slid in late trading after the chipmaker posted a second-quarter sales decline, hurt by a sluggish automotive market.
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Revenue fell 6% to $2.93 billion in the period, the Dutch chipmaker said in a statement on Monday. The sales were roughly in line with analysts’ estimates, according to data compiled by Bloomberg.
NXP 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.
The third quarter will reflect “improvement in NXP’s core end markets,” Chief Executive Officer Kurt Sievers said in the statement. Revenue in that period will be $3.05 billion to $3.25 billion, NXP said, compared with an estimate of $3.07 billion. At the midpoint, that would represent a year-over-year decline of 3%.
The stock slipped more than 4% in extended trading. It had closed at $228.27 in New York on Monday, leaving it up almost 10% for the year.
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 analyst Ken 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.