NXP Semiconductors dips after Q1 earnings, as analysts highlight industrial strength
NXP Semiconductors (NASDAQ:NXPI) shares dipped in early trading on Tuesday after the semiconductor company posted first-quarter results and issued guidance that topped expectations, prompting praise from Wall Street analysts.
Bank of America analyst Vivek Arya, who rates NXP Semiconductors (NXPI) buy with a per-share price target of $230, noted that the first-quarter results highlighted strength in its industrial internet of things as well as automotive.
"While the magnitude of the sales beat was below the average of 2% reported by peers [Texas Instruments, On Semiconductor and STMicro], so far, the result, in our view, signifies overall strength of company specific growth drivers," Arya wrote in a note to clients, highlighting strength in industrial internet of things, mobile and automotive end markets "despite a challenging macro backdrop." 
NXP Semiconductors (NXPI) shares fell nearly 2.5% to $172.84 in early trading on Tuesday.
In addition, Arya noted that NXP's (NXPI) guidance for the second-quarter came in above expectations, despite headwinds from China, which is notable given that the country accounts for more than 55% of its sales.
For the first-quarter, NXP Semiconductors (NXPI) said it earned $2.48 per share on $3.14 billion in sales, compared to estimates of $2.25 in earnings per share and $3.1 billion in sales.
Gross margins came in at 57.6%, 0.3% ahead of what analysts were expecting, Arya noted, as a result of "pricing power."
Looking ahead to the next quarter, the company expects revenue to be between $3.175 billion and $3.375 billion. Gross margins for the second-quarter are expected to be between 55.9% and 57%.
KeyBanc analyst John Vinh noted that the first-quarter results being driven by industrial, internet of things and to some extent, mobile, points to a "continuation of robust demand, incremental capacity, and strength in pricing."
Last month, investment firm Citi downgraded NXP Semiconductors (NXPI), noting the company's margins are near their peak.