NXP swings to Q2 operating profit

AMSTERDAM: Dutch chipmaker NXP Semiconductors NV, which had a difficult IPO debut in the United States this month, swung to a second quarter operating profit compared with a loss last year.

The firm, which broke even at the operating level in the first quarter, said it continued to see healthy demand from a broad base of customers but was receiving mixed signals from a few clients, indicating slowing demand.

It said overall demand, bolstered by increased design wins, was greater than current capacity. Additional capacity was being readied but will have a limited impact in the third quarter.

"Our expectation is that total comparable sales will be relatively flat on a sequential basis, and will show an increase of 20-25 percent on a year over year basis," NXP said, adding that adjusted income from operations was seen rising 7-13 percent.

NXP, whose customers include Apple Inc, Bosch and Huawei Technologies Co Ltd, was created by a leveraged buy-out in 2006 as Dutch electronics group Philips divested the businesses that made parts for its radios, television and other equipment for over 50 years.

Philips still has a 17 percent stake, while private equity firms KKR, Bain, SilverLake, Apax and AlpInvest own a combined 69 percent and there is a free float of 14 percent.

Richard Clemmer was installed as CEO by KKR in 2009 as the company struggled under the weight of debt taken on before and after its leveraged buyout.