Semiconductor solutions provider Fairchild Semiconductor (FCS) on Thursday reported a steep drop in third-quarter profit, reflecting a 23% decrease in revenues. On a per share basis, adjusted earnings, however, beat estimates by 5 cents. The company also provided revenue guidance for the fourth quarter.
For the third quarter, net income declined drastically to $2.7 million or $0.02 per share from $26.7 million or $0.21 per share in the previous year. The results of the latest quarter included restructuring and impairments of $4.1 million, up from $1.8 million in the prior-year quarter.
Excluding items, earnings decreased to $14.9 million or $0.12 a share from $34.0 million or $0.27 a share in the year-ago period. On average, 13 analysts polled by Thomson Reuters expected the company to report earnings of $0.07 per share in the third quarter. Analysts' estimate typically exclude special items.
Total revenues for the period dropped 23% to $331.8 million from $428.3 million in the third quarter of the prior fiscal year. Twelve analysts were expecting revenue of $321.86 million.
Gross margin came down year-over-year to 26.0% from 29.9% for the year-ago quarter.
Mark Thompson, Fairchild's chief executive, said, "We under-shipped distribution sell-through again in the third quarter resulting in about an $11 million reduction in channel inventory," Thompson added that the company's channel inventory now stood at a record low 9.6 weeks.
For the nine-month period, net loss was $73.3 million or $0.59 per share, compared to profit of $50.7 million or $0.40 per share in fiscal 2008. Adjusted loss was $28.7 million or $0.23 a share, compared to profit of $78.7 million or $0.63 a share in the past year. Revenues slid to $833.0 million from $1.25 billion in the same period last year.
Looking ahead, for the fourth quarter, the company expects revenue to possibly range from $333 million to $343 million. Analysts are currently looking for on revenue of $328.96 million.
Further, Fairchild projected about $3 million in charges for the fourth quarter.
FCS closed Wednesday's regular trading hours at $9.62 on the NYSE.
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