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(Bloomberg) -- NXP Semiconductors NV shares fell on Tuesday after the company announced a new chief executive officer as part of its quarterly earnings report and warned that tariff threats have created “a very uncertain environment.”
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CEO Kurt Sievers, 56, will retire from the company late this year, the Dutch chipmaker said in a statement on Monday. Rafael Sotomayor, a current NXP executive, will take the president role immediately and become CEO on Oct. 28.
Tariffs announced by US President Donald Trump threaten to add further upheaval to the semiconductor industry, which has been working through a backlog accumulated after the coronavirus pandemic. NXP’s peers, such as STMicroelectronics NV and Infineon Technologies AG, have struggled with weak demand for mature chips used in electric cars or smartphones.
NXP said Sievers, who has been CEO since 2020 and with the company for three decades, is leaving for personal reasons. Sotomayor joined the company in 2014 from Broadcom Inc.
The shares tumbled as much as 9.7% to $177.19 on Tuesday in New York, the biggest intraday decline since April 10.
What Bloomberg Intelligence Says:
NXP CEO Kurt Sievers’ decision to retire at the age of 56 might signal increasing structural challenges at the company. We still expect NXP to be under stronger market-share pressure on some key products such as automotive microcontrollers, radars and secure car access.
— Ken Hui, BI senior technology analyst
NXP forecast that revenue will decline to $2.8 billion to $3 billion in the second quarter. That compares with an average analyst estimate of $2.86 billion, according to data compiled by Bloomberg.
While NXP hasn’t noticed any changes to customer behavior so far, the tariffs are making the current environment “very uncertain,” Sievers said on a call with analysts on Tuesday.
The second-quarter guidance marks “a bit of a turning point,” Sievers said, pointing to “better backlog” and “stabilization of the order patterns from direct customers.” Sales to carmakers will be flat in the current quarter after five periods of year-on-year declines, according to Sievers. NXP made 59% of its revenue in the automotive sector in the first quarter.
First-quarter revenue fell 9% to $2.84 billion, and adjusted diluted earnings per share in the period were $2.64 a share. Analysts had estimated $2.83 billion in sales and $2.60 a share in earnings.