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TheStreet Open House

Fairchild Semiconductor Reports Results For The Third Quarter 2013

Stocks in this article: FCS

Fairchild Semiconductor (NYSE: FCS), a leading global supplier of power semiconductors, today announced results for the third quarter ended September 29, 2013. Fairchild reported third quarter sales of $364.6 million, up 2 percent from the prior quarter and third quarter of 2012.

Fairchild reported third quarter net income of $12.1 million or $0.09 per diluted share compared to a net loss of $7.5 million or $0.06 per diluted share in the prior quarter and net income of $24.7 million or $0.19 per diluted share in the third quarter of 2012. Gross margin was 31.5 percent compared to 29.1 percent in the prior quarter and 33.5 percent in the year-ago quarter.

Fairchild reported third quarter adjusted gross margin of 32.1 percent, up 230 basis points from the prior quarter and 140 basis points lower than the third quarter of 2012. Adjusted gross margin excludes accelerated depreciation related to a line closure. Adjusted net income was $21.4 million or $0.17 per diluted share, compared to net income of $1.7 million or $0.01 per diluted share in the prior quarter and net income of $32.3 million or $0.25 per diluted share in the third quarter of 2012. See the Reconciliation of Net Income to Adjusted Net Income exhibit included in this press release for more details on the other adjustment items.

“We delivered sequentially higher third quarter sales and margins while spending less on operating expenses,” said Mark Thompson, Fairchild’s chairman and CEO. “Sales growth was due primarily to strength from one large mobile customer. Sales in our high voltage business that serves the industrial, appliance and automotive end markets were also solid. Demand from the computing, TV and some portions of the tier two mobile market in Asia was incrementally weaker which impacted third quarter results and our guidance for the fourth quarter. Bookings from one of our other top mobile customers reflect some reduction in demand largely driven by the typical year-end inventory reduction. This also is reflected in our fourth quarter guidance. Gross margin and earnings were up substantially in the third quarter. Given the current modest sales growth rate for the semiconductor industry, we are also focused on increasing margins and earnings through greater operational efficiency and lower overhead spending. We will provide more details on these efforts in the earnings call later today.”

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