Chipmaker NXP Semiconductors provided a positive forecast for first-quarter profit, surpassing expectations, and reported strong revenue for the last quarter, driven by a robust automotive market, a key consumer of its technology.

NXP, based in the Netherlands, supplies chips and other technologies to the automotive, manufacturing, telecom, and connected device sectors, which are increasingly reliant on high-speed digital processing.

Global manufacturing of light vehicles increased by 9% last year, reaching pre-pandemic production levels, according to S&P Global. Additionally, the U.S. auto market experienced its strongest growth since 2019.

In the fourth quarter, the automotive consumer segment saw a 5% growth, representing 56% of NXP's total revenue in 2023.

The company's projected adjusted profit per share for the March quarter is between $2.97 and $3.38, with the mid-point of the range exceeding the consensus estimates of $3.15 from three analysts. However, the revenue forecast for the same period fell slightly short of expectations at a midpoint of $3.13 billion, attributed to anticipated weaknesses in the electric vehicles segment and the Chinese electronics market.

Kurt Sievers, NXP's president and CEO, stated, "We are navigating a soft landing by managing what is in our control, especially limiting over-shipment of products to customers."

The company's fourth-quarter revenue, ending Dec. 31, amounted to $3.42 billion, surpassing the consensus estimate of $3.4 billion. Following these reports, NXP's shares on the Nasdaq rose nearly 3% in after-hours trading and closed 2.8% higher on Monday.