Freescale Semiconductor, Ltd. announced financial results for the first quarter ended April 4, 2014. Highlights include: Net sales for the first quarter of 2014 were $1.13 billion, compared to $1.08 billion in the fourth quarter of 2013 and $981 million in the first quarter of 2013. Operating earnings for the period were $155 million, compared to $145 million in the fourth quarter of 2013 and $104 million in the first quarter of 2013. Operating earnings improved on a sequential and year-over-year basis due to higher sales and improving gross margins, partially offset by increased investments in new products and higher incentive compensation.
Net loss for the first quarter was $23 million, or $0.08 per share, compared to a net loss of $118 million, or $0.46 per share, in the fourth quarter of 2013 and a net loss of $48 million, or $0.19 per share in the first quarter of 2013. First quarter 2014 results included a $59 million loss associated with debt retirement and refinancing transactions completed during the quarter, which will result in lower interest expense in future quarters.
“We continue to see solid progress on our initiatives to increase revenue and improve gross margin,†said Gregg Lowe, president and CEO. “All five product groups generated revenue growth sequentially and year over year. With a 15 percent year-over-year growth in revenue, the company continues to make strides in gaining market share.
“Our results continue to benefit from margin expansion and deleveraging efforts, as our sequential revenue increase of 4 percent drove an adjusted earnings per share growth of 42 percent.â€
Adjusted operating earnings (defined in Note 1 to the Consolidated Financial Information attached to this press release) for the three months ended April 4, 2014 were $186 million, compared to earnings of $174 million in the fourth quarter of 2013 and $117 million in the first quarter of 2013.
Adjusted net earnings for the first quarter of 2014 were $77 million, or $0.27 per share, compared to $50 million, or $0.19 per share, in the fourth quarter of 2013 and a loss of $8 million, or $0.03 per share, in the first quarter of 2013. Adjusted net earnings improved sequentially and year over year due to improving sales and gross margin along with lower interest expense associated with the company’s capital structure initiatives.
The company’s net sales figures for the first quarter of 2014 by product group were as follows: Microcontroller net sales were $223 million, compared to $220 million in the fourth quarter of 2013 and $177 million in the first quarter of last year. On a year-over-year basis, Microcontroller revenues benefited from increased sales into distribution and higher sales of applications processors into the automotive market.
Digital Networking net sales were $249 million, compared to $246 million in the fourth quarter of 2013 and $202 million in the first quarter of last year. Year-over-year networking sales growth was broad based across service provider, enterprise and general embedded segments. Sequentially, the networking business benefited from higher sales of service provider equipment, including wireless base stations in China.
Automotive Microcontroller net sales were $304 million, compared to $267 million in the fourth quarter of 2013 and $254 million in the first quarter of last year. Automotive Microcontroller sales benefited from growth in all key geographies and in distribution due to growth in semiconductor content and higher automotive production levels.
Analog and Sensor net sales were $198 million, compared to $190 million in the fourth quarter of 2013 and $177 million in the first quarter of last year. Analog and Sensor sales benefited on a sequential and year-over-year basis from higher sales into the growing worldwide automotive market.
RF net sales, which include sales of power amplifiers to the wireless infrastructure market, were $113 million, compared to $96 million in the fourth quarter of 2013 and $86 million in the first quarter of last year. On a sequential and year-over-year basis, RF sales increased due to increased spending on 3G and 4G wireless networks, particularly in China.
Other net sales were $40 million, compared to $63 million in the fourth quarter of 2013 and $85 million in the first quarter of last year. Revenues declined primarily due to lower intellectual property revenue along with lower sales into the wireless handset market, consistent with the company’s prior decision to exit that market.
