LONDON NXP Semiconductors (Eindhoven, The Netherlands) saw fourth quarter sales rise by 8.0 percent over the third quarter of 2009 to $1130 million which was a comparable increase of 12.6 percent over the fourth quarter of 2008.
Full year total sales were $3,843 million, down from $5,443 million in 2008 but were down$792 million due to the divestment of its wireless activities in July 2008.
NXP says the remaining decline in sales was mainly related to the severe global financial crisis and the weak economic environment that affected all business segments in the first half of the year.
In the fourth quarter sales continued to improve across each segment and region, with the exception of the home business segment. NXP says its Redesign Program is ahead of schedule and is delivering more savings than originally anticipated, and the program has been expanded to cover additional areas, including employee termination costs stemming from the transaction with Trident and the closing of an additional wafer fab in Nijmegen.
It believes the annual savings that will be realized in the course of 2011 are expected to exceed $650 million (compared with the original target of $550 million by the end of 2010). The costs for the Redesign Program are now estimated to be no greater than $750 million by the end of 2011 (as opposed to $700 million by the end of 2010).
“In the fourth quarter, we saw for the first time in the last 6 quarters, a year on year growth on a comparable basis,” said Rick Clemmer, Chief Executive Officer of NXP.
“We built on the momentum of Q3 and saw continued growth in almost all business segments. This was preceded by a tough first half of the year where the business was significantly impacted by the global economic and financial crisis. The success to date of the accelerated and expanded Redesign Program, the execution of our strategic focus on High Performance Mixed Signal, improvements in our capital structure and our agility to respond to market conditions, sees us enter 2010 with more confidence, better focused and better equipped to win.”
NXP's cash position at the end of of the fourth quarter of 2009 was $1,041 million compared with $1,061 million at the end of the third quarter, taking into account payments for Redesign in the fourth quarter of $72 million.
The difference in cash position between the end of the fourth quarter 2009 and the end of the fourth quarter 2008 ($1,796 million) is mainly explained by the Redesign payments for the full year 2009, which amounted to $385 million and $286 million which was spent on bond buy backs.
From the beginning of the year NXP decided to regroup its reportable business segments reflecting the decision to build leadership in high performance mixed signal technology while maintaining a strong position in standard Products and the divestment of a major portion of the home business segment to Trident Microsystems Inc.
The transaction with Trident Microsystems covering the set-top box and television systems business lines was completed on Feb 8 and from this date, NXP will account for its investment in Trident under the equity method.
The company expect sales to be flat to slightly up in the first quarter of 2010 on a business and currency comparable basis.
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