Fairchild Semiconductor (FCS) Misses Q2 EPS by 8c; Issues Light Q3 Revenue Outlook

(Updated - July 16, 2015 7:29 AM EDT)

Fairchild Semiconductor (NASDAQ: FCS) reported Q2 EPS of $0.12, $0.08 worse than the analyst estimate of $0.20. Revenue for the quarter came in at $355.2 million versus the consensus estimate of $371.32 million.

"We grew sales for our industrial, appliance and mobile products during the quarter and held our distribution channel inventory dollars flat sequentially," said Mark Thompson, Fairchild's chairman, president and CEO. "Demand was weaker than expected during the second quarter from some mobile and appliance customers, the wireless telecom sector as well as general market distribution. We expect to increase sales in the third quarter due primarily to higher mobile and wireless telecom demand. We completed a number of important milestones in our factory consolidation program and are on schedule to realize significant manufacturing cost savings in the second half of this year."

Second Quarter Financials

"Adjusted gross margin increased nearly two points sequentially due primarily to higher factory loadings and manufacturing cost controls in the prior quarter," said Mark Frey, Fairchild's executive vice president and CFO. "R&D and SG&A expenses were $100 million, up 6% from the prior quarter due to annual merit raises and equity vesting coupled with temporarily higher legal spending. We forecast this spending level to decrease noticeably in the third quarter. We increased internal inventory about 8 percent to 111 days during the second quarter to support our manufacturing consolidation and the expected ramp in mobile sales in the second half. Free cash flow was $34 million and we repurchased more than a million shares of our stock in the second quarter. We ended the quarter with total cash and securities exceeding our debt by $95 million."

Guidance:

Fairchild Semiconductor sees Q3 2015 revenue of $355-375 million, versus the consensus of $383.7 million.

For earnings history and earnings-related data on Fairchild Semiconductor (FCS) click here.

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