Fairchild Semi Beats by a Penny

Driven by growth in their power products division, Fairchild Semiconductor(FCS Quote) swung to a profit in third quarter, beating Wall Street estimates by a penny. But the company warned that sales will fall in the fourth quarter, a period when analysts projected they would still go up modestly.

The company's shares fell 35 cents, or 2.6%, to $13.22 in after-hours trading, after shedding 81 cents, or 5.6%, to close the regular session at $13.58.

In a press release Thursday, Fairchild said third-quarter net income rose to $13.4 million, or 11 cents a share, from a loss of $5.4 million, or 5 cents a share, a year earlier.

Excluding several charges, earnings rose to $32 million, or 26 cents a share, from $5.5 million, or 5 cents a share, a year earlier. On this basis, analysts had expected the company to earn 25 cents a share, according to Thomson First Call.

Third-quarter revenue rose 259% from a year ago to $409.7 million, just shy of the consensus estimate of $410.2 million. Gross margins, at 30.3%, reached their highest level in more than three years, up 920 basis points from a year earlier and up 100 basis points sequentially.

The South Portland, Maine-based semiconductor company said power products grew to a record 77% of total sales in the third quarter. But demand in September was lower than expected, especially from Asian distributors, Fairchild said in a statement.

Fairchild expects fourth-quarter revenue to be fall as much as 5% to 10% and gross margins to shrink about 200 to 400 basis points sequentially. That was lower than the consensus estimate, which called for a 5% sequential increase in total revenue to $432.2 million. The consensus analyst earnings estimate forecasts 29 cents in the fourth quarter; Fairchild did not offer fourth-quarter earnings guidance.