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NXP’s stock slumps as CEO Kurt Sievers reveals he’ll retire later this year
- NXP Semiconductors N.V. saw its stock fall over 7% in extended trading following lower profitability and declining revenue, as CEO Kurt Sievers announced his retirement at the end of the year.
- Sievers will retire in October and has named Rafael Sotomayor as his successor, with the company reporting earnings of $2.64 per share for the first quarter, surpassing expectations.
- However, revenue dropped by 9%, impacting profitability, with a net income decrease to $490 million, down 23% from the previous year.
- Sievers highlighted challenges from external factors like tariffs affecting market uncertainty and stated efforts to maintain profitability.
- Despite the lower revenue, NXP provided an optimistic outlook for the next quarter, projecting $2.9 billion in sales at the midpoint.
- Investors reacted to the news of Sievers' retirement and transition to Sotomayor, though the company emphasized it was a personal decision with no performance-related concerns.
- Sotomayor, set to become CEO, has been integral to NXP's strategy and success, with experience at Broadcom Inc. prior to joining NXP in 2014.
- NXP's revenue decline spans all major business segments, with challenges in automotive, industrial & IoT, mobile, and communications sectors.
- Recent acquisitions by NXP, including Kinara Inc. for neural processing units, TTTech Auto AG for autonomous vehicle software, and Aviva Links Inc. for automotive connectivity systems, have aimed to strengthen its position in the market.
- The company's focus on legacy chips has hindered its progress compared to competitors diving into artificial intelligence, with struggles in the automotive sector evident from declining revenue in the latest results.
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