LONDON – Analog and power IC vendor Fairchild Semiconductor International Inc. saw profits slide sequentially on sales revenue up 1 percent in the third quarter but its net profit beat analysts' expectations while its quarterly revenue was slightly lower than the consensus.
Fairchild (South Portland, Maine) is forecasting sales will decline from $414.4 million in the third quarter to between $390 million and $410 million in the fourth quarter
In its financial results for the quarter ended Sept. 26, Fairchild announced that it achieved a net income of $35.8 million on sales of $414.4 million that were up 1 percent from the prior quarter and 25 percent higher than the third quarter of 2009. The net income was down compared to $43.8 million in the prior quarter but up dramatically compared to $2.7 million net income in the third quarter of 2009. Fairchild reported adjusted net income of $52.8 million compared to $51.3 million in the prior quarter and $14.9 million in the third quarter of 2009.
"We generated solid gross margin and earnings growth in the third quarter due to continued improvements in product mix," said Mark Thompson, Fairchild's president and CEO, in a statement. "Our mix benefited from stronger sales of our mobile power and switch products as well as many of our high voltage products and we expect these trends to continue in the fourth quarter. We grew sales 1 percent sequentially as we reduced days of inventory in the distribution channel to a historic low for us."
"We paid off $123 million in debt and repurchased $8 million in stock while generating $58 million of free cash flow. At the end of the quarter, total cash and securities exceeded our debt by a record high $93 million. We grew internal inventory 4 days to just under 75 days," said Mark Frey, Fairchild's executive vice president and CFO.