Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
NXP Semiconductors N.V., profitability ratios
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
- Gross Profit Margin
- The gross profit margin demonstrated a generally increasing trend over the five-year period, rising from 49.9% in 2017 to 54.84% in 2021. There was a slight dip observed in 2020 to 49.18%, but this was followed by a notable recovery and improvement in 2021, indicating enhanced efficiency in production or better pricing power in the most recent year.
- Operating Profit Margin
- The operating profit margin showed significant fluctuations with a peak of 28.81% in 2018, followed by a sharp decline to 7.22% in 2019 and a further decrease to 4.85% in 2020. However, a strong recovery occurred in 2021, bringing the margin back up to 23.35%. This pattern suggests operational challenges or increased operating costs during 2019 and 2020, but a return to more favorable operating conditions thereafter.
- Net Profit Margin
- The net profit margin also experienced volatility, decreasing from 23.93% in 2017 to a low of 0.6% in 2020. Despite the recovery to 16.91% in 2021, the net margin remained below earlier levels, reflecting the impact of factors such as increased expenses, taxation, or other non-operating items affecting net profitability. The sharp contraction in 2019 and 2020 underscores a period of diminished profitability.
- Return on Equity (ROE)
- The return on equity followed a similar trajectory, peaking at 21.02% in 2018 before plummeting to 0.58% in 2020. A substantial rebound to 28.66% was recorded in 2021, the highest level over the period. This indicates that shareholder value creation was significantly impaired during the middle years but recovered strongly in the final year, possibly supported by improved earnings or more efficient capital management.
- Return on Assets (ROA)
- Return on assets declined sharply from 9.21% in 2017 to 0.26% in 2020, illustrating decreased asset profitability during this period. The recovery to 8.97% in 2021 suggests enhanced utilization or profitability of the asset base, although the 2021 figure had not fully returned to the 2018 peak of 10.26%. This indicates some challenges in maintaining asset efficiency, followed by an improvement in recent times.
Return on Sales
Return on Investment
Gross Profit Margin
NXP Semiconductors N.V., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | 6,067) | 4,235) | 4,618) | 4,851) | 4,619) | |
| Revenue | 11,063) | 8,612) | 8,877) | 9,407) | 9,256) | |
| Profitability Ratio | ||||||
| Gross profit margin1 | 54.84% | 49.18% | 52.02% | 51.57% | 49.90% | |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 48.25% | 44.53% | — | — | — | |
| Analog Devices Inc. | 61.83% | 65.87% | 67.00% | — | — | |
| Applied Materials Inc. | 47.32% | 44.72% | 43.72% | — | — | |
| Broadcom Inc. | 61.36% | 56.58% | 55.24% | — | — | |
| Intel Corp. | 55.45% | 56.01% | — | — | — | |
| KLA Corp. | 59.93% | 57.81% | 59.08% | — | — | |
| Lam Research Corp. | 46.53% | 45.88% | 45.15% | — | — | |
| Micron Technology Inc. | 37.62% | 30.57% | 45.72% | — | — | |
| NVIDIA Corp. | 62.34% | 61.99% | — | — | — | |
| Qualcomm Inc. | 57.51% | 60.67% | 64.57% | — | — | |
| Texas Instruments Inc. | 67.47% | 64.10% | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
1 2021 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenue
= 100 × 6,067 ÷ 11,063 = 54.84%
2 Click competitor name to see calculations.
The financial data reveals several trends in the company's performance over a five-year period ending December 31, 2021.
- Revenue
- The revenue exhibits fluctuations, starting at US$ 9,256 million in 2017 and slightly increasing to US$ 9,407 million in 2018. There was a decline in 2019 and 2020, reaching US$ 8,877 million and US$ 8,612 million respectively. However, 2021 shows a significant recovery and growth, with revenue rising sharply to US$ 11,063 million, which is the highest in the five-year span.
- Gross Profit
- Gross profit follows a generally similar pattern to revenue but with some variations. It begins at US$ 4,619 million in 2017, rising modestly to US$ 4,851 million in 2018. A slight decrease occurs in 2019 and a more noticeable drop in 2020 to US$ 4,235 million, before rebounding strongly to US$ 6,067 million in 2021. This indicates that while the company faced pressures in the middle years, the latter period saw an improved ability to generate profit from sales.
- Gross Profit Margin
- The gross profit margin percentage provides insight into the efficiency and profitability related to the company’s core operations. The margin improved from 49.9% in 2017 to over 51.5% in 2018 and further to 52.02% in 2019, indicating enhanced cost management or pricing strategy during this interval. However, there was a decline to 49.18% in 2020, corresponding with lower revenue and gross profit in that year. A strong recovery occurred in 2021 with the margin rising to 54.84%, which is the highest recorded margin in the period and suggests improved profitability and operational efficiency.
Overall, the data indicates a period of moderate revenue and profit decline in 2019 and 2020, possibly due to external challenges or market conditions. In 2021, the company demonstrates a strong rebound with both revenue and gross profit reaching peak levels, alongside the highest gross profit margin in the timeframe. This improvement suggests successful strategic adjustments or favorable market developments leading to enhanced financial performance.
Operating Profit Margin
NXP Semiconductors N.V., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | 2,583) | 418) | 641) | 2,710) | 2,102) | |
| Revenue | 11,063) | 8,612) | 8,877) | 9,407) | 9,256) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 23.35% | 4.85% | 7.22% | 28.81% | 22.71% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 22.20% | 14.02% | — | — | — | |
| Analog Devices Inc. | 23.12% | 26.74% | 28.55% | — | — | |
| Applied Materials Inc. | 29.87% | 25.37% | 22.93% | — | — | |
| Broadcom Inc. | 31.03% | 16.80% | 15.24% | — | — | |
| Intel Corp. | 24.62% | 30.41% | — | — | — | |
| KLA Corp. | 35.97% | 25.87% | 30.41% | — | — | |
| Lam Research Corp. | 30.64% | 26.62% | 25.53% | — | — | |
| Micron Technology Inc. | 22.68% | 14.01% | 31.51% | — | — | |
| NVIDIA Corp. | 27.18% | 26.07% | — | — | — | |
| Qualcomm Inc. | 29.16% | 26.58% | 31.59% | — | — | |
| Texas Instruments Inc. | 48.84% | 40.76% | — | — | — | |
| Operating Profit Margin, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 28.30% | 25.89% | — | — | — | |
| Operating Profit Margin, Industry | ||||||
| Information Technology | 26.70% | 22.67% | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
1 2021 Calculation
Operating profit margin = 100 × Operating income ÷ Revenue
= 100 × 2,583 ÷ 11,063 = 23.35%
2 Click competitor name to see calculations.
The financial data presents a clear fluctuation in operating income, revenue, and operating profit margin over the five-year period ending in 2021.
- Operating Income
- Operating income increased from 2102 million US dollars in 2017 to 2710 million in 2018, indicating solid growth. However, it sharply declined to 641 million in 2019 and further dropped to 418 million in 2020, representing a considerable decrease in profitability during these years. A significant recovery occurred in 2021, with operating income rising substantially to 2583 million US dollars, nearly returning to the 2018 level.
- Revenue
- Revenue showed a moderate increase from 9256 million US dollars in 2017 to 9407 million in 2018. This was followed by a gradual decline over the next two years, decreasing to 8877 million in 2019 and further to 8612 million in 2020. In 2021, revenue rebounded strongly to 11063 million US dollars, marking the highest value in the five-year span and reflecting a robust recovery.
- Operating Profit Margin
- The operating profit margin peaked at 28.81% in 2018, aligning with the peak in operating income and revenue for that year. A sharp contraction is evident thereafter, with the margin falling to 7.22% in 2019 and deteriorating further to 4.85% in 2020. The margin recovered significantly in 2021 to 23.35%, indicating improved operational efficiency and profitability, in line with the rebound in operating income and revenue.
Overall, the data indicates a period of strong profitability in 2017 and 2018, followed by a marked decline in financial performance in 2019 and 2020. The year 2021 shows a solid recovery across all key indicators, suggesting a positive turnaround in the company’s operational and financial health.
Net Profit Margin
NXP Semiconductors N.V., net profit margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to stockholders | 1,871) | 52) | 243) | 2,208) | 2,215) | |
| Revenue | 11,063) | 8,612) | 8,877) | 9,407) | 9,256) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 16.91% | 0.60% | 2.74% | 23.47% | 23.93% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 19.24% | 25.50% | — | — | — | |
| Analog Devices Inc. | 19.00% | 21.79% | 22.75% | — | — | |
| Applied Materials Inc. | 25.53% | 21.04% | 18.52% | — | — | |
| Broadcom Inc. | 24.54% | 12.39% | 12.05% | — | — | |
| Intel Corp. | 25.14% | 26.84% | — | — | — | |
| KLA Corp. | 30.04% | 20.96% | 25.73% | — | — | |
| Lam Research Corp. | 26.72% | 22.42% | 22.70% | — | — | |
| Micron Technology Inc. | 21.16% | 12.54% | 26.97% | — | — | |
| NVIDIA Corp. | 25.98% | 25.61% | — | — | — | |
| Qualcomm Inc. | 26.94% | 22.09% | 18.07% | — | — | |
| Texas Instruments Inc. | 42.35% | 38.69% | — | — | — | |
| Net Profit Margin, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 25.83% | 23.10% | — | — | — | |
| Net Profit Margin, Industry | ||||||
| Information Technology | 23.60% | 19.65% | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
1 2021 Calculation
Net profit margin = 100 × Net income attributable to stockholders ÷ Revenue
= 100 × 1,871 ÷ 11,063 = 16.91%
2 Click competitor name to see calculations.
- Revenue Trends
- The revenue exhibited moderate fluctuations during the analyzed period. It increased slightly from 9,256 million USD in 2017 to 9,407 million USD in 2018, then decreased to 8,877 million USD in 2019, followed by a further decline to 8,612 million USD in 2020. However, a notable recovery occurred in 2021, with revenue rising significantly to 11,063 million USD, surpassing previous years.
- Net Income Attributable to Stockholders
- Net income showed a volatile pattern. The figure remained stable from 2017 to 2018, with values around 2,200 million USD. A sharp decline occurred in 2019 and 2020, dropping dramatically to 243 million USD and then further to 52 million USD. In 2021, net income rebounded strongly to 1,871 million USD, showing significant recovery but still below the initial levels of 2017 and 2018.
- Net Profit Margin
- Net profit margin mirrored the net income trend closely. It was stable and relatively high at 23.93% and 23.47% in 2017 and 2018 respectively, indicating strong profitability. A steep reduction occurred in 2019 and 2020, with margins falling to 2.74% and 0.6%, signaling a period of very low profitability or operational challenges. By 2021, the margin improved considerably to 16.91%, reflecting the partial restoration of profitability alongside revenue growth.
- Overall Financial Performance Insights
- The company experienced a period of stability in 2017 and 2018, followed by significant financial distress in 2019 and 2020, as indicated by sharp declines in net income and profitability despite relatively stable revenue. The recovery seen in 2021 is marked by a substantial increase in revenue and improvements in net income and profit margin, suggesting effective management responses or favorable market conditions. Nonetheless, net income and margins have not yet returned to the peak levels observed at the beginning of the period, implying ongoing challenges or a transitional phase toward regaining full financial strength.
Return on Equity (ROE)
NXP Semiconductors N.V., ROE calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to stockholders | 1,871) | 52) | 243) | 2,208) | 2,215) | |
| Stockholders’ equity | 6,528) | 8,944) | 9,441) | 10,505) | 13,527) | |
| Profitability Ratio | ||||||
| ROE1 | 28.66% | 0.58% | 2.57% | 21.02% | 16.37% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 42.18% | 42.66% | — | — | — | |
| Analog Devices Inc. | 3.66% | 10.17% | 11.64% | — | — | |
| Applied Materials Inc. | 48.08% | 34.21% | 32.94% | — | — | |
| Broadcom Inc. | 26.99% | 12.40% | 10.92% | — | — | |
| Intel Corp. | 20.83% | 25.79% | — | — | — | |
| KLA Corp. | 61.53% | 45.65% | 44.21% | — | — | |
| Lam Research Corp. | 64.85% | 43.53% | 46.89% | — | — | |
| Micron Technology Inc. | 13.34% | 6.89% | 17.59% | — | — | |
| NVIDIA Corp. | 25.64% | 22.91% | — | — | — | |
| Qualcomm Inc. | 90.88% | 85.54% | 89.35% | — | — | |
| Texas Instruments Inc. | 58.27% | 60.90% | — | — | — | |
| ROE, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 25.79% | 24.53% | — | — | — | |
| ROE, Industry | ||||||
| Information Technology | 42.41% | 35.69% | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
1 2021 Calculation
ROE = 100 × Net income attributable to stockholders ÷ Stockholders’ equity
= 100 × 1,871 ÷ 6,528 = 28.66%
2 Click competitor name to see calculations.
- Net Income Attributable to Stockholders
- The net income exhibited a significant decline from 2017 to 2020, decreasing from 2215 million US dollars in 2017 to a low of 52 million in 2020. However, a notable recovery occurred in 2021, with net income rising sharply to 1871 million US dollars. The period reflects high volatility in earnings, with a substantial drop followed by a strong rebound.
- Stockholders’ Equity
- The stockholders’ equity demonstrated a steady downward trend throughout the observed periods. Beginning at 13,527 million US dollars in 2017, it decreased consistently each year, reaching 6,528 million US dollars by the end of 2021. This trend indicates a sustained reduction in the company's net asset base over the five-year span.
- Return on Equity (ROE)
- The ROE followed an uneven trajectory over the years presented. It started at 16.37% in 2017, rose to 21.02% in 2018, then sharply declined to 2.57% in 2019 and further to 0.58% in 2020. In 2021, the ROE rebounded significantly to 28.66%, reaching the highest point in the period analyzed. This pattern reflects fluctuating profitability relative to shareholders' equity, with the most pronounced dip coinciding with the lowest net income and a recovery aligning with the substantial increase in earnings.
- Overall Insights
- The financial data indicate that the company faced a challenging period between 2018 and 2020, characterized by declining profitability and equity base. Despite the decline in equity, the recovery in net income and ROE in 2021 suggests a resurgence in operational performance and effective utilization of equity to generate profits. The decrease in equity could reflect factors such as dividend payments, share buybacks, or asset write-downs, though such elements are not detailed in the data. The strong ROE in 2021, in conjunction with the equity decrease, implies improved efficiency in generating returns for stockholders during the latest period reported.
Return on Assets (ROA)
NXP Semiconductors N.V., ROA calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to stockholders | 1,871) | 52) | 243) | 2,208) | 2,215) | |
| Total assets | 20,864) | 19,847) | 20,016) | 21,530) | 24,049) | |
| Profitability Ratio | ||||||
| ROA1 | 8.97% | 0.26% | 1.21% | 10.26% | 9.21% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 25.46% | 27.78% | — | — | — | |
| Analog Devices Inc. | 2.66% | 5.69% | 6.37% | — | — | |
| Applied Materials Inc. | 22.80% | 16.19% | 14.22% | — | — | |
| Broadcom Inc. | 8.91% | 3.90% | 4.04% | — | — | |
| Intel Corp. | 11.80% | 13.65% | — | — | — | |
| KLA Corp. | 20.23% | 13.11% | 13.05% | — | — | |
| Lam Research Corp. | 24.59% | 15.47% | 18.26% | — | — | |
| Micron Technology Inc. | 9.96% | 5.01% | 12.91% | — | — | |
| NVIDIA Corp. | 15.05% | 16.15% | — | — | — | |
| Qualcomm Inc. | 21.93% | 14.60% | 13.31% | — | — | |
| Texas Instruments Inc. | 31.48% | 28.91% | — | — | — | |
| ROA, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 13.62% | 11.80% | — | — | — | |
| ROA, Industry | ||||||
| Information Technology | 14.65% | 11.44% | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
1 2021 Calculation
ROA = 100 × Net income attributable to stockholders ÷ Total assets
= 100 × 1,871 ÷ 20,864 = 8.97%
2 Click competitor name to see calculations.
- Net Income Attributable to Stockholders
- The net income shows a significant decline from 2,215 million US dollars in 2017 and 2,208 million in 2018 to a much lower value of 243 million in 2019. This downward trend continues sharply in 2020, with net income dropping to 52 million. However, there is a strong recovery in 2021, with net income rising substantially to 1,871 million. Despite the volatility, net income in 2021 remains below the levels seen in 2017 and 2018.
- Total Assets
- Total assets exhibit a steady decline over the period from 24,049 million US dollars at the end of 2017 to 19,847 million in 2020. In 2021, total assets increase slightly to 20,864 million, indicating a modest recovery. Overall, total assets have decreased by approximately 13% from 2017 to 2021, suggesting asset contraction during this time frame.
- Return on Assets (ROA)
- The ROA mirrors the pattern observed in net income, beginning at 9.21% in 2017 and improving to 10.26% in 2018. It then plunges dramatically to 1.21% in 2019 and further declines to 0.26% in 2020, indicating diminished profitability relative to the asset base. In 2021, ROA rebounds sharply to 8.97%, approaching the levels seen in the initial years of the period but still slightly lower than in 2017 and 2018.