ZTCJ learned that NXPI Semiconductor (NXPI.US) will announce its third-quarter 2024 performance after the US stock market closes on Monday. Zacks data shows that analysts expect third-quarter revenue to be between $3.15 billion and $3.35 billion, with a general expectation of $3.25 billion, a 5.3% year-on-year decline; expected third-quarter non-GAAP EPS to be between $3.21 and $3.63, with a general expectation of $3.43, a 7.3% year-on-year decline, a forecast that has remained unchanged in the past 60 days.

Factors to Watch

NXPI's performance in the third quarter may benefit from strong momentum in industrial and Internet of Things (IoT), driven by demand from China and the Asia-Pacific region, with strong demand expected to drive revenue growth in the overall mobile terminal market. Of particular note is NXPI's single-chip solution Trimension SR250, aimed at the industrial and IoT markets, combining on-chip processing capabilities with short-range ultra-wideband radar and secure ranging, which could drive sales in the upcoming quarter being reported.

Zacks data shows the estimate for NXPI's industrial and IoT revenue at $0.62 billion, a 2.1% year-on-year increase; the forecast for the mobile terminal market is $0.394 billion, indicating a 4.5% year-on-year growth.

However, NXPI's performance in the third quarter is likely to be affected by the continued softness in the automotive and communication infrastructure terminal markets. Inventory adjustments being made by some direct Tier-1 automotive customers are expected to weaken NXPI's performance in the third quarter.

Due to weak global base station deployments and demand shift for gallium nitride products faster than expected, the slump in the communication infrastructure sector is expected to be the main obstacle for the company. Meanwhile, macroeconomic concerns, escalating geopolitical tensions, and high inflation are expected to weigh on its customers' IT spending.

Zacks data shows that the estimated revenue for the autos business is currently $1.82 billion, a decrease of 3.6% compared to the same period last year; the estimated revenue for the communication infrastructure and other departments in the third quarter of 2024 is $0.4143 billion, a decrease of 25.9% year-on-year.

Previously, Texas Instruments (TXN.US) as a pioneer in the semiconductor industry, was the first to release its financial report. Despite the seemingly promising performance in the previous quarter, analysts expect that due to weak demand in autos and electric vehicles, as well as a bleak outlook for the industrial market, the autos and industrial supply chains in the December quarter will face challenges.

Furthermore, the competition among global companies is intensifying, especially in the analog market in the USA. These factors have led analysts to lower their December quarter expectations for Texas Instruments, NXP Semiconductors, Microchip Technology (MCHP.US), ON Semiconductor, and Allegro Microsystems (ALGM.US).

In addition, after ON Semiconductor announced better-than-expected quarterly performance last week, the company's President and CEO Hassane El-Khoury stated that despite the outperformance, the company will continue to focus on achieving sustained performance in the current environment through execution and prudent financial management.