Fairchild Reports Third Quarter 2007 Financial Results
Fairchild Semiconductor announced results for the third quarter ended September 30, 2007. Fairchild reported third quarter sales of $426.8 million, up 4% from the prior quarter and 2% higher than the third quarter of 2006.
Fairchild reported third quarter net income of $20.3 million or $0.16 per diluted share compared to net income of $3.4 million or $0.03 per diluted share in the prior quarter and net income of $25.1 million or $0.20 per diluted share in the third quarter of 2006. Included in these results is a net $7.8 million charge related to potential litigation outcomes and $2.4 million related to restructuring actions to streamline the company’s cost structure. Gross margin was 30.3%, 230 basis points higher sequentially and 40 basis points lower than in the third quarter of 2006.
Fairchild reported third quarter adjusted net income of $34.1 million or $0.27 per diluted share, compared to adjusted net income of $17.7 million or $0.14 per diluted share in the prior quarter and adjusted net income of $30.6 million or $0.25 per diluted share in the third quarter of 2006. Adjusted net income excludes amortization of acquisition-related intangibles, purchase accounting charges and in-process R&D related to the acquisition of System General, restructuring and impairments, charges for potential litigation outcomes, net loss on the sale of the RF product line and net gain on the sale of the LED product line, associated net tax benefits of these items and other acquisition-related intangibles, and certain discrete tax benefits and charges.
"We achieved sales at the high end of our third quarter guidance range on the strength of robust computing and handset demand as well as strong turns orders," said Mark Thompson, Fairchild’s President and CEO. "We delivered excellent earnings leverage on these increased sales through better gross margin and great operating expense controls. The Analog Product Group increased sales 9% sequentially due primarily to strong demand for analog switches and voltage regulators. We delivered these results even as we further improved internal and distribution channel inventory turns."