Broadcom leads chips lower; NXP bucks downturn aided by strong Q1, guidance
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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.
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