Fairchild Semiconductor Posts Profit - Update

(RTTNews) - Fairchild Semiconductor International Inc. (FCS) on Thursday reported a swing to profit in the fourth quarter, on improved margins and a two percent increase in sales, while the prior year was impacted by losses from the sale of securities. Earnings for the quarter topped Wall Street estimates by a cent, while sales missed expectations.

The company provided sales guidance for the first quarter, the midpoint of which is indicated to exceed analysts' estimates. Nonetheless, investors were not overly enthused with the announcement, dragging Fairchild shares down about three percent on the Nasdaq.

The San Jose, California-based company posted quarterly net income of $0.9 million or $0.01 per share, compared with a net loss of $13.6 million or $0.11 per share last year.

Results for the quarter include impairment charges of $8 million, while the the prior year included a loss of $13 million from the sale of securities as well as impairment charges of $8 million.

Excluding items, adjusted earnings for the quarter were $13.5 million or $0.11 per share, compared with $12.3 million or $0.10 per share a year ago. On average, 13 analysts polled by Thomson Reuters expected earnings of $0.09 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter edged up to $341.1 million from $333.4 million in the prior year, but missed analysts' expectations of $342.58 million.

Among end markets, sales to industrial and appliance businesses were robust in the quarter, while automotive weakened. The company expects sales in these markets to be seasonally higher in the first quarter.

Gross margin for the quarter expanded to 30.9 percent from 29.8 percent last year.

For the first quarter, Fairchild expect sales in the range of $340 million to $355 million, while analysts currently estimate $346.6 million.

The company expects first-quarter adjusted gross margin of 28 percent to 29 percent due to lower factory loadings from the prior quarter, the resumption of some payroll related taxes and ongoing fab streamlining costs.

Fairchild stock is trading at $13.58, down $0.41 or 2.93%, on a volume of 677 thousand shares.