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Sales Rise at Freescale Semi

Alexei Oreskovic

Newly private Freescale Semiconductor grew its sales 9% in the fourth quarter, despite tough business conditions in many of its key markets.

The Austin, Texas, chipmaker's fourth-quarter revenue was $1.62 billion, at the high end of its guided range of $1.54 billion and $1.62 billion.

"It's a challenging environment out there, so we're pleased with our performance," said CEO Michel Mayer in an interview with TheStreet.com.

Sales in Freescale's transportation and standard products business grew 4.3% year over year, as softness in the U.S. auto industry was offset by steady business in the Japanese car market, where Mayer said Freescale's revenue increased 50% year over year.

The company's wireless and mobile solutions group posted $578 million in fourth-quarter sales, compared with $476 million in the year-ago period.

Freescale reported earnings before taxes, depreciation and amortization in the fourth quarter of $401 million vs. $362 million in the year-ago period.

The company said it was not able to provide net income yet, as it was still in the process of transitioning to purchase-based accounting as a result of its change of ownership.

In December Freescale became a private company in a $17.6 billion leveraged buyout by a consortium of private-equity firms led by Blackstone Group.

Mayer said the company's business and operations have not changed since the LBO.

"We design, build and sell chips; and the chips don't know if they're public or private," he said.

Cell phone giant Motorola(MOT Quote) -- Freescale's former parent company -- seems to have taken a shine to public chips lately, though.

On Monday, Texas Instruments(TXN Quote) announced a "strategic relationship" to provide custom-developed chips for Motorola's 3G cell phone handsets.

Mayer said Freescale continued to have a strong relationship with Motorola, particularly for high-end 3G phones.

As more of Motorola's cell phones become 3G phones, however, Mayer said it's to be expected that other companies would get a piece of the business.

"I never expected that we would get 100% of Motorola's silicon spend," Mayer said.