Fairchild Semiconductor Raises Sales Outlook
Fairchild Semiconductor International Inc. (South Portland, ME) reported that quarterly sales would reach the higher end of its previous targets, sending its shares up as much as 8%. The company also said it expects gross margins to be at the lower end of its forecast of 26% to 28% because of weaker pricing and lighter factory loads.
Fairchild stated that it was seeing improving demand from its distributors as inventories were worked down. Demand from Asia, and especially China, was significantly improved. Fourth-quarter sales are now expected to be down about 5% from the third quarter, compared with its previous forecast for a drop of 5% to 10%.
Fairchild has seen the greatest strength in products serving the consumer, computing and power-supply markets, with strong demand for high-power switches and power-conversion products.
"Bookings have improved during the first half of this quarter," stated Chief Executive Kirk Pond. "Order rates have increased from third-quarter levels, but are still below the 'unsustainably' high rates of the first half of the year."