SAN FRANCISCO, Calif. ó Strong demand for cars in the US and China and next-gen wireless infrastructure improvements in China helped buoy Freescale Semiconductor Ltd.'s third quarter results up 5 percent over second quarter results.
Yesterday Freescale reported net earnings of $23 million in the third quarter of 2013 on sales revenue of $1.09 billion, that compared with its second quarter loss of $65 million. Total company sales were up 8 percent since last year, with microcontroller sales up 16 percent over quarter two and 20 percent over last year.
Year-over-year all five product groups had higher sales, with the most growth in microcontrollers, digital networking, and RF. Net sales increasing over second quarter results were microcontrollers (reaching $230 million), digital networking ($238 million), automotive MCUs ($270 million), and RF ($89 million). Analog and sensor net sales dipped, however, from the second quarter's $188 million to $181 million in the third quarter.
Growth in automotive and general embedded markets smoothed out any quarterly or seasonal dips and in other markets for MCUs, said Freescale's chief financial officer Alan Campbell on the Freescale's earnings call. The consumer markets in the third quarter boosted MCU and application processor sales up 10 percent, but over the year, the automotive and embedded markets filled more orders. Automotive MCU sales increased 7 percent year-over-year, which Freescale attributes to demand from increased automobile production in the US and China markets. Analog and sensors saw seasonal decline in sales in automotive market sequentially for the third quarter.
Freescale anticipates gains in automotive MCU sales to continue. President and CEO Gregg Lowe cited electronic content in cars and the growth in automotive market in Asia and China. "The increase in number of cars and content happening at the same time is a double effect," said Lowe on the call. Lowe also mentioned growing business in Japan, saying interest in diversifying the supply chain in Japan will probably benefit Freescale.
China shows up prominently on the earnings in wireless. RF sales are up 10 percent over the second quarter, but RF sales are up 22 percent over the year because of "increased spending on next generation wireless networks primarily in China," said Campbell. Freescale benefited from digital networking business in addition to the wireless infrastructure spending happening in China. "We're expanding our sales on business in China," Lowe said.
For the fourth quarter, Freescale said it expected revenues to be 1.03 billion to 1.07 billion, with more product revenue in line with the third quarter; digital revenues and automobile to be in line with the third quarter.
"We continue to see solid progress on our strategic objectives sequentially and year over year," said Gregg Lowe, president and CEO. "Our team remains focused on meeting our long-term goals of delivering revenue growth and margin expansion," in a press release.