SAN FRANCISCO—Freescale Semiconductor Inc.'s top executive said Thursday (Jan. 27) that the company is in position to grow in 2011 after reporting sequential revenue growth for the sixth consecutive quarter.
Rich Beyer, Freescale's chairman and CEO, said the company turned in a strong quarter and strong fiscal year, continuing to "build a foundation for future success" with compelling product introductions and design win momentum, while at the same time achieving necessary financial performance metrics.
In the red hot media tablet market, Beyer said
processors are in 11 tablets that were in production late last year and
have since been designed into others. "The volumes of these [tablets] are
still quite modest," Beyer said, adding that some of the tablets that
i.MX515 powers are being sold in developing markets like China and
India. "The platform is becoming more accepted," Beyer said.
Beyer noted that Freescale products power many e-readers, including the
Amazon Kindle. Beyer said the e-reader market is likely to be
considerably bigger than the tablet market for Freescale in the short
term, because Apple Inc.'s iPad has such a massive lead in the tablet
But long term, Beyer said, tablets will be a significant
opportunity for Freescale as well as competitors like Qualcomm Inc.,
Nvidia Corp. and Texas Instruments Inc. The tablet form factor will be
adopted by many types of devices—not all of which will resemble the
iPad—Beyer said. "There are going to be a ton of applications for
tablets," he said.
Beyer also said that Freescale scored goodwill points for responsiveness with customers—particularly automotive customers—during
2010, when chip shortages challenged the industry. Beyer said Freescale
went to great lengths to get customers the parts they needed on time to
avoid manufacturing shut downs and other problems.
Freescale reported sales of $1.18 billion for the first quarter, up 3 percent sequentially and up 24 percent compared to the fourth quarter of 2009. Freescale posted a net loss for the quarter of $102 million, narrowed from $156 million in the previous quarter and $114 million in the year-ago quarter.
Income from operations was $17 million in the fourth quarter, up from $1 million in the previous quarter and a loss of $261 million in the fourth quarter of 2009. Freescale reported adjusted operating earnings—excluding depreciation and other items—of $177 million in the fourth quarter, up from $158 million in the third quarter of 2010 and $59 million in the fourth quarter of 2009.
Freescale's earnings before Interest, taxes, depreciation and amortization (EBITDA) were $280 million for the fourth quarter, up from $253 million in the third quarter of 2010 and $168 million in the fourth quarter of 2009.
"We are very pleased with the quarter, both the financial performance we delivers as well as the foundation that continues to strengthen in terms of new products, design wins and so forth," Beyer said.
For the full year 2010, Freescale posted net sales of $4.46 billion, up 27 percent from 2009. The company reported a net loss for the year of $1 billion, compared to a net income of $748 million for 2009. EBITDA for calendar year 2010 was $957 million, compared to $304 million in calendar year 2009.
Freescales microcontroller net sales were $415 million in the fourth quarter, down less than 1 percent from previous quarter but up 25 percent compared to the year-ago quarter. RF, analog and sensor net sales were $285 million in the fourth quarter of 2010, up 5 percent from the previous quarter and up 23 percent from the fourth quarter of 2009.
Fourth quarter sales of networking and multimedia products was $338 million, flat with the previous quarter and up 35 percent compared with the year-ago quarter. Cellular products sales were $111 million in the fourth quarter of 2010, up 23 percent from the previous quarter, but down 1 percent compared to the fourth quarter of 2009.
Freescale said it expects sales for the first quarter of 2011 to be roughly flat with the fourth quarter of 2010. Beyer said the company expects growth in the second quarter and further growth in the third and fourth quarters. The company generally sees some softness in the third quarter of the year, but does not expect that to be the case this year, Beyer said.
Freescale said its capital expenditures for 2010 amounted to $281 million, roughly 6 percent of sales.