NXP, Analog forecast about 5% coronavirus impact on quarterly revenues
NXP has given revenue guidance update on the quarter. “Subsequent to our earnings call on February 3, 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,” Richard Clemmer, CEO of NXP, said in a statement. NXP Chief Executive Officer. “What we have seen is lower than expected sell-through and order push outs in both our distribution channel and with direct customers. While we have not seen any material order cancellations, we currently expect the impact to revenue in the first quarter to be in the range of $50 million to $150 million.”
Given that NXP had forecast a 1Q20 to be between $2.20 billion and $2.26 billion the $100 million impact at the midpoint represents a 4.7 percent downgrade but that at the extreme could be as much as 7 percent.
Meanwhile Analog Devices has said that its 2Q20 revenue would be redueced due to coronavirus. Analog Devices’ 1Q20 ended on February 1. The company said its Q2 revenue is expected to be $1.35 billion, plus or minus $50 million. This includes an approximately $70 million revenue reduction due to the near-term risks associated with the coronavirus. At the mid-point that puts the impact at about 5.2 percent.
Next: More colour from Clemmer
NXP’s Clemmer provided a bit more colour on the pattern of the impact.
Of the coronavirus impact NXP has seen he said: “At the lower end of this range, the $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 $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.”
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