NXP Semiconductors shares slide as auto weakness dents forecast
July 23 (Reuters) -Shares of NXP Semiconductors NXPI.O fell around 9% in premarket trading on Tuesday, dragging other automobile-chip makers as its disappointing quarterly revenue forecast sparked concerns of a delay in demand recovery.
The Dutch firm on Mondayforecast third-quarter revenue of $3.15 billion to $3.35 billion, compared with analysts' average estimate of $3.36 billion, and recorded its worst quarterly revenue decline in four years for the second quarter.
Revenue at the company's automotive segment fell 7% from a year ago as automakers cut back on placing new orders for chips amid a soft economy and slowing sales of electric vehicles.
Shares of peers such as Onsemi ON.O, Texas Instruments TXN.O and Microchip Technology MCHP.O fell between 1% and 3% in premarket trading.
NXP could also take a hit from increased competition in China as domestic chipmakers have been investing heavily to boost production of older chips, known as legacy chips, in the face of trade restrictions.
The Chinese market was the largest contributor to NXP's sales in 2023, accounting for about a third of the total revenue.
The company said it expects adjusted earnings with a midpoint of $3.42 per share for the third quarter, well below the average estimate of $3.61.
The weakness in NXP's automotive sector more than offset a 21% revenue growth in the mobile segment, which has seen robust demand for its chips due to the AI boom.
Reporting by Zaheer Kachwala in Bengaluru; Editing by Saumyadeb Chakrabarty
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