NXP Semiconductors N.V. provided an update to its first quarter 2020 revenue guidance due to potential impacts from the novel coronavirus (COVID 19).

“Subsequent to our earnings call on Feb. 3, we now believe that our expectations for total revenue in the first quarter of 2020 will be reduced due to the impact of the coronavirus,” said Richard Clemmer, NXP CEO. “Getting our arms around the actual business impact of the virus has been a challenge given the fluid and dynamic situation, but we want to stress that the most important thing at this stage is the health and safety of all our NXP team members and their families.

“From a business perspective, the impact is very much an estimate at this time, based on business trends over the last several weeks post the Lunar New Year holiday. What we have seen is lower than expected sell-through and order push-outs in both our distribution channel and with direct customers,” Clemmer noted. “While we have not seen any material order cancellations, we currently expect the impact to revenue in the first quarter to be in the range of $50 million to $150 million.

“At the lower end of this range, the $50 million impacts is what we’ve actually seen so far, with the weakness most pronounced in the weeks after the Lunar New Year holiday, however, we have now seen more normal order levels in the last two weeks,” Clemmer added. “The $150 million upper range is estimated on a scenario where we would see a return of weakness in the coming weeks, like what we saw right after Lunar New Year. We need to stress that these assumptions are based on less than perfect data, as the situation in China continues to be highly fluid.”