Eindhoven, Netherlands, Feb 3, 2026, 14:09 CET
- NXP projects first-quarter revenue will surpass estimates, driven by stronger demand in automotive and industrial sectors.
- After hours, shares dropped roughly 5%, dragged down by an 18% plunge in its communications infrastructure unit.
- Revenue and adjusted profit for the fourth quarter exceeded forecasts, driven largely by robust demand for automotive chips.
NXP Semiconductors projected first-quarter revenue that beats Wall Street’s expectations, fueling speculation the industrial-chip slump might be stabilizing. Despite this, its shares dipped in after-hours trading, weighed down by ongoing telecom-related softness. 1
The outlook is crucial because investors have been searching for a clear sign that spending on factory and automation equipment is picking up after a volatile period. NXP, tied closely to this cycle, offers one of the first major forecasts for demand in early 2026. 2
NXP reported that around 55% of its revenue comes from automotive, with about 18% from industrial sectors. The company offers microcontrollers—tiny chips that serve as a device’s control unit—radar sensors for vehicles, and connectivity chips found both in cars and industrial equipment.
NXP projects first-quarter revenue between $3.05 billion and $3.25 billion. The midpoint, $3.15 billion, beats analysts’ average forecast of $3.10 billion, per LSEG data cited by Reuters.
The company projected adjusted earnings per share—which excludes certain items—between $2.77 and $3.17. The midpoint, $2.97, edges past the $2.90 estimate, according to Reuters.
Shares dropped roughly 5% in after-hours trading. A key drag was the communications segment, where fourth-quarter revenue dropped 18%, highlighting how telecom operators continue to tighten their budgets.
NXP posted fourth-quarter revenue of $3.34 billion, slightly beating the $3.31 billion analysts had predicted. Adjusted earnings came in at $3.35 per share, topping the expected $3.27, Reuters reported.
Automotive revenue hit $1.88 billion this quarter, according to the company’s release. Industrial and IoT pulled in $640 million. Communications infrastructure and other revenue dropped 18% year-over-year to $334 million.
Chief executive Rafael Sotomayor described the first half of 2025 as “challenging,” yet highlighted an “improving demand environment” as the company expands its focus on software-defined vehicles. He also mentioned “physical AI,” a broad term covering AI connected to sensors and real-world machines.
NXP posted $793 million in non-GAAP free cash flow for Q4, roughly 24% of its revenue, the company reported. It returned $592 million to shareholders during the quarter, with $338 million spent on buybacks and $254 million paid out in dividends. 3
The company also announced it wrapped up the sale of its MEMS sensors unit for $900 million in cash, plus up to $50 million more linked to technical milestones. MEMS sensors are small-scale devices that detect motion, pressure, or other physical changes.
NXP goes head-to-head with Texas Instruments, Infineon, and STMicroelectronics in automotive and industrial semiconductors. Investors often line up their forecasts side-by-side since many of the same auto and factory clients appear throughout the sector.
Telecom’s mixed results reveal some market segments remain weak. NXP warned its forecast depends on management’s demand estimates, which could change. The company reported channel inventory—stock held by distributors—stood at 10 weeks at the quarter’s close.
