* Sees first-quarter revenue $945 mln-$985 mln vs est $933.1
* Fourth-quarter adjusted loss $0.15/share vs est loss $0.18
* Fourth-quarter revenue $957 mln vs est $940.4 mln
By Sruthi Ramakrishnan
Jan 29 Freescale Semiconductor Ltd,
which makes chips for cars and machinery, forecast
current-quarter revenue above analysts' estimates as demand
returns in its wireless and enterprise businesses.
Order trends strengthened through the fourth quarter and
into the current quarter, Chief Financial Officer Alan Campbell
said on a conference call with analysts.
Slower telecom spending stemming from a weak global economy
and stiff competition in the increasingly crowded mobile phone
sector weighed on the results of equipment providers and handset
manufacturers last year.
"Looking ahead, we are cautiously optimistic about the
wireless and enterprise capex trends in China and the U.S., and
expect our sales to benefit from these trends going forward,"
Chips used in cars and trucks account for 40 percent of
Freescale's revenue. Its chips are also used in industrial
equipment, cellphones and consumer products.
The company expects first-quarter revenue of between $945
million and $985 million. Analysts on average were expecting
revenue of $933.1 million, according to Thomson Reuters I/B/E/S.
"It's too early to say that things have bottomed but at the
same time it's kind of nice to see them both comment and guide
above expectations, particularly in this environment," Sanford
C. Bernstein & Co analyst Stacy Rasgon said.
Bigger rival Texas Instruments Inc last week also
reported higher-than-expected revenue, but cautioned on
uncertain demand. It said macroeconomic worries had caused
customers to defer orders.
Freescale, which went public in May 2011, was taken private
in 2006 for $17.6 billion by a group of private equity firms
including Blackstone Group LP, Carlyle Group and TPG
It was the biggest leveraged buyout of a technology company
on record, but was criticized because it left Freescale with
huge debt, hurting its ability to compete in the
investment-intensive chip business.
"Because of the amount of debt that they carry on their
balance sheet, even a little bit of revenue upside or even a
little bit of gross margin upside can have an outsized effect on
the earnings," analyst Rasgon said.
The company had $6.38 billion in long-term debt as of Dec.
Chief Executive Gregg Lowe, who left Texas Instruments to
lead Freescale in June, has embarked on a restructuring that he
hopes will reverse losses in market share that the chipmaker has
suffered in nine of the past 10 years.
The company has been struggling with falling prices and
shrinking margins, and its factories have been operating at
The chipmaker said last quarter it would combine its
manufacturing operations to cut costs, and focus research and
development on select product groups.
Freescale's net loss increased to $35 million, or 14 cents
per share, in the fourth quarter, from $6 million, or 2 cents
per share, a year earlier.
Excluding items, Freescale reported a loss of 15 cents per
share. Revenue fell 5 percent to $957 million.
Analysts on average were expecting a loss of 18 cents per
share, on revenue of $940.4 million.
Freescale's shares have risen about 38 percent since Oct.
25, when Lowe announced the restructuring.
Shares of the company, which has a market value of about
$3.04 billion, closed at $12.39 on the New York Stock Exchange
on Tuesday and were little changed after the bell.