NXP Semiconductor Hits a High: Who Needs Apple?

Shares of NXP Semiconductor (Nasdaq: NXPI  ) hit a 52-week high today. Let's look at how it got here and whether clear skies are ahead.

How it got here
NXP Semiconductor is one of the market leaders in near-field communications chips, which have been heralded as hopefully one of the main facilitators of modern mobile payment technology. Google (Nasdaq: GOOG  ) has embraced it with its Google Wallet service, among others.

One of the looming questions before this week was whether or not Apple (Nasdaq: AAPL  ) would similarly include NFC support in its iPhone 5, which was unlikely. As it turned out, the iPhone 5 indeed did not adopt the technology, but the lack of any meaningful investor reaction suggests that no one really expected the iPhone maker to use NFC, so its absence was already priced in.

On Thursday, NXP also went ahead and narrowed third-quarter guidance, expecting product revenue to grow sequentially by 8% to 10%. Total sales should increase 6% to 8%, and adjusted earnings per share should be between $0.53 and $0.59. Both of those narrowed ranges are right on target with Street estimates, but it looks like that was enough to boost shares to new highs.

How it stacks up
Let's see how NXP stacks up against some of its semiconductor peers.

NXPI Chart

NXPI data by YCharts.

We'll also analyze some fundamental metrics.

Company

Price/Sales (TTM)

Sales Growth (TTM)

Net Margin (TTM)

ROE (TTM)

NXP Semiconductor 1.6 (7.7%) (7.1%) (37.5%)
STMicroelectronics (NYSE: STM  ) 0.7 (17.0%) (5.6%) 1.7%
Texas Instruments (Nasdaq: TXN  ) 2.5 (5.5%) 12.1% 14.4%

Source: Reuters. TTM = trailing 12 months.

The broader semiconductor industry has been on hard times lately, and these three players are no different. STMicroelectronics and Texas Instruments also happen to be iPhone suppliers for different components, but that hasn't helped them avoid overall revenue declines over the past year. Part of TI's decrease is related to its decision to exit the baseband processor market to focus on its core analog business.

What's next?
Even without Apple, NXP sits in some other notable smartphones, including the Samsung Galaxy S III that has been selling well. An Apple win would have been a boon, but it looks like NXP is doing all right without the iPhone.

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Fool contributor Evan Niu owns shares of Apple, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of NXP Semiconductors, Google, and Apple. Motley Fool newsletter services have also recommended creating a bull call spread position in Apple. The Motley Fool has a disclosure policy.
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