69.7% comparable year on year sales growth and increased gross profit
* NXP’s preliminary first quarter results do not include the quarterly results of Trident Microsystems, Inc. NXP’s final first quarter results will be published in due course, after Trident’s publication of their quarterly results. NXP accounts for its investment in Trident under the equity method.
Eindhoven, The Netherlands, May 4, 2010 – NXP Semiconductors today announced first quarter total sales of USD 1,165 million, a comparable year on year increase of 69.7% (nominal 66.0%) and a comparable sequential increase of 6.7% (nominal 0.3%). Comparable year on year sales growth in our High Performance Mixed Signal business segment was 82.5% and 81.6% in our Standard Products business segment. Sales continued to improve across each business segment and region.
Income (loss) from Operations (IFO) in the first quarter of 2010 was nil compared with a loss of USD 347 million in the same period of 2009. This improvement is mainly attributable to our market share gains driven by design wins across a wide range of our business lines, our responsive manufacturing operations and the economic recovery. The IFO in the first quarter of 2010 also improved against a loss of USD 205 million in the fourth quarter of 2009 largely due to a higher gross profit supported by lower operating expenses. The company achieved a gross profit of USD 428 million, or 36.7% of sales, compared with USD 68 million, or 9.7% of sales, in the first quarter of 2009, and USD 393 million, or 33.9% of sales, in the fourth quarter of 2009. The year on year increase in gross profit in the first quarter of 2010 was largely due to higher sales supported by cost reductions, which we achieved as a result of the ongoing Redesign Program.
NXP’s cash position at the end of the first quarter of 2010 was USD 870 million compared with USD 1,706 USD at the end of the same period last year and USD 1,041 million at the end of the fourth quarter of 2009. The difference in cash position between the end of the first quarter of 2010 and the end of the fourth quarter 2009 is mainly explained by the cash spent on the Redesign Program of USD 86 million and the cash amount of USD 47 million paid to Trident upon completion of the transaction on February 8, 2010.
The Redesign Program is ahead of schedule and management believes that we have achieved approximately USD 650 million of annual savings as per March 31 2010, as compared to our annualized third quarter results for 2008. The closure of parts of our front-end manufacturing facility in Hamburg, Germany, as announced earlier, took place in the first quarter of 2010.
Effective January 1, 2010, NXP has decided to regroup its reportable business segments reflecting the decision to build leadership in High Performance Mixed Signal technology while maintaining a strong position in Standard Products.
The full preliminary Q1 report is available on the NXP website www.nxp.com/investor.
NXP Semiconductors provides High Performance Mixed Signal and Standard Product solutions that leverage its leading RF, Analog, Power Management, Interface, Security and Digital Processing expertise. These innovations are used in a wide range of automotive, identification, wireless infrastructure, lighting, industrial, mobile, consumer and computing applications. Headquartered in Europe, the company has about 27,000 employees working in more than 25 countries and posted sales of USD 3.8 billion in 2009.
This release may contain certain forward-looking statements with respect to the financial condition, results of operations and business of NXP and certain plans and objectives of NXP with respect to these items. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.