Freescale's financial losses widen

LONDON – Financial losses at Freescale Semiconductor Inc. increased in the fourth quarter of 2012 as sales fell sequentially by 5.2 percent. However, the company offered the possibility of better than seasonal growth in its forecast for sales in 1Q13.

"Looking forward, we have built a good foundation for future growth by charting a new course that has the buy-in of our customers and our employees," said Gregg Lowe, CEO of Freescale (Austin, Texas), in a statement. "We've assembled a strong management team that is committed to helping deliver long-term growth and profitability."

Freescale reported a net loss of $35 million on sales of $957 million in the fourth quarter of 2012. Sales were down 5.2 percent compared with the $1.01 billion in both 3Q12 and 4Q11. The net loss increased from $24 million in 3Q12 and from $6 million in 4Q11.

For 1Q13 Freescale forecast it would achieve sales of between $945 million and $985 million, with a mid point up 0.8 percent on the 4Q12 sales. Semiconductor sales are typically flat or a few percentage points down sequentially in the first quarter of the year.

For the full year of 2012 Freescale made net loss of $102 million on sales of $3.95 billion that fell 13.6 percent from $4.57 billion in calendar 2011.

Following a strategic review conducted in 3Q12 Freescale has reorganized its business units and now reports net sales based on the following product groups: microcontrollers, automotive microcontrollers, digital networking, analog & sensors, RF and other.

Of these groups microcontrollers – selling into such markets as industrial, multi-market, smart energy, healthcare and multimedia applications – performed best with sales of $197 million up 2.6 percent compared with 3Q12 and up 14.5 percent compared with 4Q11. The largest group, automotive microcontrollers, reported quarterly sales of $236 million down both sequentially and year-on-year.

Freescale reported that at the end of 4Q12 the company had cash on hand of $711 million, down from $763 million at the end of 3Q12 and long-term debt of $6.375 billion.


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