NXP Semiconductors Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Dutch chip maker NXP Semiconductors (NAS: NXPI) plummeted as low as 21% on Tuesday after its quarterly results and outlook missed Wall Street estimates.

So what: NXP's third-quarter results didn't miss by much (EPS of $0.50 versus the consensus of $0.51), so it's safe to assume that today's overall market nastiness is fueling a good chunk of the stock's big sell-off. Unfortunately for bargain hunters, however, Mr. Market seems to be steadily coming to his senses, with the shares now down only about 8% at the time of this writing.

Now what: "We do not anticipate a reacceleration of orders to occur in the short-term until our customers have more confidence in the stability of end-market demand," CEO Richard Clemmer warned. "As such, we anticipate order patterns over the next few quarters will continue to be volatile." In fact, NXP now sees fourth-quarter EPS of just $0.20-$0.30, while analysts were expecting $0.52. Of course, with the stock now trading at an even bigger discount to much larger rivals like Texas Instruments (NYS: TXN) and Analog Devices (NYS: ADI) , NXP seems like a long-term opportunity worth checking out.

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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of NXP. The Fool owns shares of Texas Instruments. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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