The Zhitong Finance App learned that NXP (NXPI.US) announced financial results for the third quarter of 2026 after the US stock market on October 27 (early morning of October 28, Beijing time). Revenue for the quarter was US$3.786 billion, up 19% year over year, higher than the market's agreed expectations; non-GAAP diluted earnings per share of US$4.20, up 35% year over year, also exceeded expectations.
Non-GAAP gross margin of 58.6%, operating margin of 37.1%; free cash flow for the quarter was US$1.21 billion, accounting for 31.9% of revenue.
By business, the automotive business revenue was US$2.07 billion, up 13% year on year; industry and the Internet of Things were US$802 million, up 39% year on year; communication infrastructure and others were US$503 million, up 54% year on year. The company said data center infrastructure momentum continued; and the mobile business was US$411 million, down 4% year on year.
After the financial report was released, NXP dropped nearly 9% after the market. As of press release, the stock had fallen 7.87% to 234 US dollars.
What is dragging down stock prices is guidance. The company expects fourth-quarter revenue of US$3.75 billion to US$3.95 billion, with a median value of US$3.85 billion (up about 15% year over year), lower than analysts' expectations of US$3.87 billion; median non-GAAP operating profit of US$1.44 billion is also slightly lower than expected.
CEO Rafael Sotomayor said that the unique growth momentum of companies in the automotive and industrial sector is contributing to the acceleration, opening up long-term space for software-defined automobiles and trusted physical AI. The company also announced an additional $5 billion share repurchase authorization.
Notably, NXP's biggest competitor, Texas Instruments released a strong revenue forecast last week, saying “the industrial, automotive, and data center sectors will see widespread growth.” Texas Instruments said it plans to expand production capacity to meet the demand for increased orders and is likely to reach a higher level in the 2026 budget for new plants and equipment.
The prospects of the two companies were divided, compounding market concerns about the AI bubble, amplifying the sell-off caused by this gap in guidance.