Freescale Semiconductor Q3 Adj Profit Tops View, Issues Rosy Sales Outlook

(RTTNews) - Embedded processing solutions provider Freescale Semiconductor Ltd. (FSL) reported Thursday a profit for the third quarter that soared from last year, reflecting improved margins and sales growth. Adjusted earnings per share topped analysts' expectations and quarterly sales matched their estimates. The company also provided revenue guidance for the fourth quarter, below Street view.

Freescale Semiconductor was formed by the divestiture of the semiconductor products segment of Motorola in 2004. In December 2006, Freescale was acquired by a consortium led by private equity firm Blackstone Group LP for the sum of $17.6 billion or at $40 per share.

The company was formerly known as Freescale Semiconductor Holdings I, Ltd. and changed its name to Freescale Semiconductor, Ltd. in April 2012.

"Our improving profitability and cash flow generation demonstrate the value of the growth and margin initiatives we have been delivering as a company. In addition, each of our five product groups has grown at double digit rates so far in 2014, and we are well positioned to continue gaining market share," President and CEO Gregg Lowe said in a statement.

The Austin, Texas-based company reported net earnings of $125 million or $0.40 per share for the third quarter, sharply higher than $23 million or $0.09 per share in the prior-year quarter.

Excluding items, adjusted net earnings for the quarter was $150 million or $0.49 per share, compared to $51 million or $0.20 per share in the year-ago quarter.

On average, 16 analysts polled by Thomson Reuters expected the company to report earnings of $0.43 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew to $1.21 billion from $1.09 billion in the same quarter last year, and met seventeen Wall Street analysts' consensus estimate of $1.21 billion.

Gross margin for the quarter improved 270 basis points to 46.3 percent from last year's 43.6 percent.

Looking ahead to the fourth quarter, the company expects net sales in a range of $1.075 billion to $1.125 billion, with Street currently looking for revenues of $1.18 billion.

FSL closed Thursday's regular trading session at $18.06, up $0.49 or 2.79% on a volume of 2.83 million shares. However, the stock lost $1.15 or 6.37% in after-hours trading.