(Reuters) – Chipmaker NXP Semiconductors forecast first-quarter profit above target and reported better-than-expected revenue for the last quarter on Monday, banking on a strong automotive market, a key consumer of its technology.

Netherlands-based NXP supplies manufacturers with chips and other technologies needed for high-speed digital processing used in industries such as automotive, manufacturing, telecom and the Internet of Things (IoT).

Manufacturing of light vehicles grew 9% globally last year and hit pre-pandemic production levels, according to a report by S&P Global. Meanwhile, growth in the U.S. auto market was its best since 2019 last year.

The automotive consumer segment grew 5% in the fourth quarter, accounting for 56% of NXP’s overall revenue in 2023.

NXP forecast adjusted profit per share for the March quarter between $2.97 and $3.38. The mid-point of the range is higher than the $3.15 consensus estimates from three analysts, according to LSEG data.

However, the revenue forecast came in at a midpoint of $3.13 billion, shy of expectations of $3.16 billion, due to anticipated weakness in the electric vehicles segment and the Chinese electronic market.

“We are navigating a soft landing by managing what is in our control, especially limiting over-shipment of products to customers,” said Kurt Sievers, NXP president and chief executive officer.

Revenue in the fourth quarter ended December 31, was $3.42 billion, higher than the consensus estimate of $3.40 billion.

Nasdaq-listed shares of NXP rose nearly 3% in trading after the bell. The stock closed 2.8% up on Monday.

(Reporting by Yuvraj Malik in Bengaluru; Editing by Tasim Zahid)

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