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NXP expects declining sales in Q1

Posted: 23 Feb 2007 ?? ?Print Version ?Bookmark and Share

Keywords:NXP Semiconductors? semiconductor? sales? CRT TV? John Walko?

NXP Semiconductors said in an interim statement that it expects a sequential fall in sales in the range of 7-13 percent (on a currency comparable basis) during the first quarter of 2007 compared to fourth quarter of 2006.

The company blames "the overall weakened semiconductor market environment experienced in the final months of 2006 and the normal seasonal pattern" for the poor outlook.

In the statement released Wednesday (Feb. 21) NXP said sales during the three months ended Dec. 31, 2006 were about $1.6 billion, a fall of 12.4 percent compared to the same period in 2005, improving to a decline of 6.9 percent excluding foreign currency effects. Also, compared with Q3 of the 2006, sales decreased by 7.2 percent.

Adjusted earnings before interest, tax and amortizations and excluding one-off items and discontinued businesses but including the results of the Crolles alliance project, which NXP has recently decided to leave, came to around $ 281 million in the last quarter of 2006. This reflects NXP's stand alone results and hence is not comparable to the first three quarters of 2006 when NXP was part of the Philips group.

After spending approximately $115 million on the acquisition of 10.7 percent of the shares of SSMC in Q4, NXP ended the quarter with cash and cash equivalents of $1.23 billion as of Dec. 31, 2006.

The company said Q4 sales were badly impacted by the softening of the market for chipsets for high-end mobile phones and the fast transitioning from analog CRT TVswhere NXP holds a 30 percent market shareto digital TV, an area in which the company is still strengthening its position.

NXP said the recent purchase of Silicon Laboratories' RF CMOS based transceivers and monolithic cellular system chips business unit "will improve the competitive offering in the one chip mobile phone platforms." The company has also taken measures to strengthen its sales efforts, especially in Asia.

"Despite the more challenging environment for the industry for the fourth quarter and onwards, I am pleased with the overall progress we have made in 2006, and in particular the completion of our move towards being a standalone company," said Frans van Houten, president and CEO of NXP in the interim statement.

He added, "We will continue to be focused on delivering improvements through an accelerated Business Renewal phase 2, helping us to deal effectively with the continuing market slowdown."

- John Walko
EE Times Europe

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