Freescale Semiconductor Inc.'s third quarter net loss narrowed sharply from the year-ago period largely due to the absence of large reorganization costs and the company made sequential gains in margins as it continued to whittle down operating expenses to counter pressures from the weak economy.
The Austin, Texas-based company posted a net loss of $410 million for the three months ended Oct. 2, compared with a net loss of $3.5 billion in the fiscal 2008 comparable quarter.
In the recently ended quarter, revenue plunged 37 percent, to $893 million, from $1.4 billion, but improved from $824 million in the immediately preceding quarter.
The company closed its latest quarter with approximately $1.33 billion in cash and short-term investments, up slightly from $1.29 billion in the prior quarter. Gross profit margins fell to 30 percent in the recent quarter, down from 42 percent in the comparable 2008 period but rose from 23 percent in the previous quarter.
"Third quarter results represent very strong execution on the part of the Freescale team," said
Rich Beyer, chairman and CEO of Freescale in a statement. "Revenues in our core businesses grew sequentially, operating profitability improved significantly and we ended the quarter with more than $1.3 billion in cash."
Sales at Freescale's business division fell across the board from the year-ago quarter but showed sequential improvement as the company and rivals in the semiconductor industry experienced stronger demand for chips following signs the general economy was beginning to recover from a deep slump.
Microcontroller sales, for instance, were up 22 percent sequentially, to $291 million from $238 million in the second quarter. Sales in the division fell from $408 million in the 2008 third quarter.
The company's decision to exit the cellular handset business negatively impacted sales in the recently concluded quarter. Sales in the continuing cellular division were $122 million, down from $344 million in the year-ago quarter.
Networking and multimedia sales improved sequentially to $234 million from $216 million but were down 24 percent from $307 million in the 2008 comparable quarter.
In the RF, analog and sensors division, sales climbed to $208 million from $201 million in the previous quarter but fell from $261 million in the year-ago quarter.
On an adjusted basis—after stripping out the impact of goodwill, business reorganization costs and other one-time expenses—Freescale reported earnings of $28 million for the recent quarter, compared with a loss of $24 million for the prior quarter and $2.9 billion for the year-ago quarter.