Fairchild Semiconductor ( FCS) swung to a third-quarter loss due to lower sales and a restructuring charge. The chip pioneer lost $20.8 million, or 17 cents a share, in the quarter, compared with $13.4 million, or 11 cents a share, a year ago. Excluding the charge and items including amortization, Fairchild lost a pro forma $3 million, or 3 cents a share, in the latest quarter. That was wider than the Thomson First Call consensus estimate for a loss of 1 cent a share. Fairchild reported progress in reducing channel inventories, saying they've been cut by more than four weeks over the last two quarters though a "disciplined approach to loading our factories and our focus on channel sell-through." Fairchild also said its gross margin rose by nearly a percentage point in the quarter, reflecting lower depreciation. Sales fell 16% from a year ago to $345.5 million, about $1 million shy of estimates. The company forecast a 5% sequential increase in fourth-quarter revenue and a 200- to 300-basis-point improvement in gross margin. Analysts expect the company to post fourth-quarter revenue of $363.5, which would represent a sequential gain of 4.9%. "We have a higher starting backlog position than a quarter ago and are focused on managing product mix and factory loadings to support this higher demand, especially in analog and low power switches," the company said. The stock closed at $14.82 Thursday, about 10.4 times this year's Thomson First Call estimate and 9.8 times the 2006 consensus.