Shares of NXP Semiconductor NV closed 1.8% higher today after the Dutch chipmaker posted first-quarter results that topped the consensus estimate by a small margin.

NXP, a former Philips NV unit that spun out in 2006, is best known as a provider of vehicle processors. It also supplies chips for a variety of other devices including industrial robots and handsets. NXP manufactures its chips at more than a half-dozen in-house fabs.

The company closed the first quarter ended March 31 with $3.13 billion in revenue, which represents an increase of only 0.2% from the same time a year earlier. Nevertheless, NXP managed to slightly top the consensus analyst estimate of $3.127 billion.

One factor behind the flat quarterly growth was a 1% sales decline in the chipmaker’s flagship auto unit, which accounts for over half its revenue. The unit’s chips are used by carmakers to power a variety of vehicle components including infotainment displays and safety systems. NXP also makes processors for more specialized tasks, such as powering electric scooter motors.

The company’s Comm, Infra and Other revenue segment also experienced a demand drop in the fourth quarter. Sales declined 25% year-over-year, to $399 million. The segment includes the revenue generated by NXP’s networking chip lineups, which are used in data center switches and routers as well as carrier infrastructure.

The decline in NXP’s infrastructure and auto units was fully offset by growth across its other core businesses. Its mobile chip business saw sales jump 35% year-over-year, to $349 million. Demand for industrial and IoT chips rose 14% in the same time frame to reach $574 million.

The company’s mobile chip portfolio includes smartphone sensors such as accelerometers. It also sells circuits that handset makers can use to power a device’s Wi-Fi module, display and other subcomponents.

NXP’s industrial and IoT business, the other major contributor to its better-than-expected quarterly results, sells a broader range of products. Chips made by the unit can be found in factory robots’ motors. It also supplies semiconductors for other systems including buildings’ air conditioning and lightning systems as well as utility meters.

In the first quarter, NXP inked a deal with Honeywell International Corp. to supply chips for a line of building control systems sold by the latter company. The chipmaker also made investments in its core auto business. And it debuted a new vehicle compute module, the S32 CoreRide, that combines a processor with power management circuits and networking gear for connecting to a car’s other subsystems.

“Our first-quarter results, guidance for the second quarter, and our early views into the second half of the year underpin a cautious optimism that NXP is successfully navigating through this industry-wide cyclical downturn,” said Chief Executive Kurt Sievers. “We continue to manage what is in our control enabling NXP to drive solid profitability and earnings in a challenging demand environment.””

The company’s adjusted net income in the first quarter climbed from $396 million a year earlier to $438 million. That translated into adjusted earnings of $3.24 per share, about 2% higher than the $3.16 consensus estimate. NXP expects to end the current quarter with adjusted earnings of $3 to $3.41 per share on $3.02 billion to $3.2 billion in revenue, in line with what the market expected.

Photo: NXP