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Last Update: 13-Oct-11 10:03 ET
Fairchild Semi Guides Fourth Quarter Revenue Below Consensus
Fairchild Semi (FCS $12.50 +0.26) reported third quarter earnings of $0.34 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of $0.32.
Revenues fell 2.7% year/year to $403.2 million versus the $404.1 million consensus -- company lowered revenue guidance last month; adjusted gross margin of 36.0 percent, down 120 basis points quarter/quarter and 50 basis points year/year.
For the fourth quarter, the company expects fourth quarter revenue guidance to be $350 million to $370 million versus the $395.95 million Capital IQ Consensus Estimate.
"Our current scheduled backlog is nearly sufficient to achieve the low end of this range. We expect adjusted gross margin to be between 32 to 34 percent as we adjust factory loadings lower in the fourth quarter to reduce inventory... Mobile and automotive demand was in line with expectations. Computing demand remained muted and we continue to drive inventory lower in the distribution channel for these products. Consumer and solar demand remains weak. Distribution sell-through decreased 9 percent sequentially which was more than expected and resulted in a modest build of channel inventory. We plan to ship substantially less into the channel than our distribution customers are forecasting for sell through in the fourth quarter. This should enable us to exit this year with a leaner inventory position and be ready to grow sales again in 2012."
Revenues fell 2.7% year/year to $403.2 million versus the $404.1 million consensus -- company lowered revenue guidance last month; adjusted gross margin of 36.0 percent, down 120 basis points quarter/quarter and 50 basis points year/year.
For the fourth quarter, the company expects fourth quarter revenue guidance to be $350 million to $370 million versus the $395.95 million Capital IQ Consensus Estimate.
"Our current scheduled backlog is nearly sufficient to achieve the low end of this range. We expect adjusted gross margin to be between 32 to 34 percent as we adjust factory loadings lower in the fourth quarter to reduce inventory... Mobile and automotive demand was in line with expectations. Computing demand remained muted and we continue to drive inventory lower in the distribution channel for these products. Consumer and solar demand remains weak. Distribution sell-through decreased 9 percent sequentially which was more than expected and resulted in a modest build of channel inventory. We plan to ship substantially less into the channel than our distribution customers are forecasting for sell through in the fourth quarter. This should enable us to exit this year with a leaner inventory position and be ready to grow sales again in 2012."
