NXP Semiconductors Announces Second Quarter 2008 Results

NXP Semiconductors today announced second quarter sales of USD 1,524 million, a comparable decrease of 1.9% on the second quarter of 2007 and a comparable decrease of 0.6% over the first quarter of 2008, reflecting the continuing softness of the overall market. Adjusted EBITDA in the second quarter was USD 114 million, down from USD 190 million in the second quarter of 2007 and down from USD 183 million in the first quarter of 2008. Adjusted EBITA showed a loss of USD 29 million this quarter compared to a profit of USD 9 million in the same period last year. Although costs were significantly reduced this quarter leading to improved gross margins, the strong negative impact of the weaker dollar, which had an EBIT impact of approximately USD 70 million, offset these gains and led to a decreased EBITA.

Frans van Houten, President and CEO of NXP Semiconductors, commented:

“We were able to achieve a sales level in line with our guidance, primarily as a result of solid sales performance by both the MultiMarket Semiconductors and Automotive & Identification businesses. Overall, the Home business made progress in digital TV, in particular through production ramp-ups with Philips and another leading CE brand and a design win with Loewe, but the decline in analog TV continued. The Mobile & Personal business suffered from soft market conditions, but saw continued design-in traction in 3G, EDGE and Ultra Low Cost phones with Samsung.”

“I am pleased to say that we are swiftly executing on our strategy focusing on scale and leadership positions. This is evidenced by the good progress we are making in the creation of ST-NXP Wireless: in this quarter, we announced the name of the JV, its Executive Management Team, received regulatory approvals, including from the European Commission, and finalized labor council consultations. This transaction will give us a stake in an ambitious and exciting joint venture, as well as USD 1.55 billion in cash enabling us to pursue growth and increased investments in our core businesses. Furthermore, we announced the acquisition of the Conexant STB business and we signed the definitive agreement for the formation of a JV with Thomson creating the leader in Can tuners.”

“The continued focus on our Business Renewal strategy resulted in improved gross margins, however savings have been eroded by the continuing weakness of the dollar. A core priority for the remainder of the year is to take additional decisive steps to mitigate our currency exposure and re-align our business to better suit our reduced size following the creation of ST-NXP Wireless.”

Outlook: Due to the overall market sentiment we continue to see a relatively flat market. The company expects a year-over-year comparable mid single digit sales decrease, translating into similar sales levels as in the second quarter.