Spansion Spanked by Falling Chip Prices

Spansion's revenue in the three months ended Sept. 28 totaled $630.8 million, up 3% year over year, which CEO Bertrand Cambou described as a great achievement in the current business environment.

The chipmaker said its business selling flash chips for cell phones increased 8% sequentially to $320 million, as strong sales in North America, Korea, China and Europe offset an industry slowdown in Japan's handset market.

Cambou said the company was taking "aggressive action" to reduce its cost structure and enhance Spansion's cash position. During the third quarter, Spansion cut salaries and capital spending, as well as research and development projects.

Spansion said its operating expenses will decline by approximately $10 million in the current quarter.

The company projected that net sales in the fourth quarter will decline slightly from the third quarter. The average analyst expectation called for sales to increase about 3% to $650 million.

"While we remain optimistic about Spansion's long-term opportunity, our expectations for the fourth quarter are tempered due to the uncertain economic environment," Cambou said in a statement.