QRVO - Broadcom leads chips lower; NXP bucks downturn aided by strong Q1 guidance

2023-05-02 11:08:09 ET

Broadcom ( NASDAQ: AVGO ) was among the largest decliners in the semiconductor industry on Tuesday as the sector sold off on banking and Fed-related fears, despite strong earnings and guidance from NXP Semiconductors ( NASDAQ: NXPI ).

There was no company specific news that resulted in Broadcom's ( AVGO ) nearly 4.5% decline , but investors have increased their concerns in recent days that its deal to buy VMware ( VMW ) may fall through in light of the U.K.'s recent ruling on the Microsoft-Activision deal.

Nvidia ( NVDA ), which touched a one-year high on Monday, lost 1.7% , while AMD ( NASDAQ: AMD ) and Intel ( INTC ) fell around 0.5% each.

AMD ( AMD ) is slated to report first-quarter results after the close of trading and analysts expect the company to earn 56 cents per share on $5.31B in revenue.

Conversely, NXP Semiconductors ( NXPI ) rose 2% - though off their best levels of the session - even as the company issued stronger-than-expected guidance and strong first-quarter results.

Looking ahead, NXP ( NXPI ) expects second-quarter sales will be within a range of $3.1B and $3.3B, topping the $3.04B that analysts expect. The company expects adjusted earnings to be between $3.07 and $3.49 per share.

NXP ( NXPI ) said it earned $3.19 per share, excluding one-time items during the first-quarter, on $3.12B in revenue. Analysts were forecasting $3.12 per share, excluding one-time items, and $3B in sales.

The Kurt Sievers-led company said its GAAP gross margin during the period was 56.7% and its operating margin was 26.4%, while its adjusted gross and operating margins were 58.2% and 34.8%, respectively.

NXP ( NXPI ) also generated $632M in cash flow from operations and it had an adjusted free cash flow of $381M during the period.

Texas Instruments ( TXN ) and Analog Devices ( ADI ), which both compete with NXP Semiconductors ( NXPI ), were mixed, as TI fell 1.5% , while Analog Devices rose 0.5% .

Other semiconductor stocks were mixed in early trading, as Microchip Technology ( MCHP ) rose 0.8% and ON Semiconductor ( ON ) added 0.2%, while Micron Technology ( MU ) and Qorvo ( QRVO ) declined 1.2% and 0.6%, respectively.

More on semiconductors

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• U.S. proposes rules to block China, Russia-linked companies from CHIPS funding

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