NXP updates revenue outlook due to potential impact from the Coronavirus

“Subsequent to our earnings call on February 3rd, we now believe that our expectations for total revenue in the first quarter of 2020 will be reduced due to the impact of the coronavirus,” said Richard Clemmer, NXP Chief Executive Officer, in the update. “Getting our arms around the actual business impact of the virus has been a challenge given the fluid and dynamic situation, but we want to stress that the most important thing at this stage is the health and safety of all our NXP team members and their families. From a business perspective, the impact is very much an estimate at this time, based on business trends over the last several weeks post the Lunar New Year holiday. What we have seen is lower than expected sell-through and order push outs in both our distribution channel and with direct customers,” Clemmer continues. While NXP have not seen any material order cancellations, the company currently expect the impact to revenue in the first quarter to be in the range of USD 50 million to USD 150 million. "At the lower end of this range, the USD 50 million impact is what we’ve actually seen so far, with the weakness most pronounced in the weeks after the Lunar New Year holiday, however, we have now seen more normal order levels in the last two weeks. The USD 150 million upper range is estimated on a scenario where we would see a return of weakness in the coming weeks, like what we saw right after Lunar New Year. We need to stress that these assumptions are based on less than perfect data, as the situation in China continues to be highly fluid,” the updates continues.