Freescale Semiconductor Q1 Results Top Estimates; Issues Rosy Sales Outlook

(RTTNews) - Embedded processing solutions provider Freescale Semiconductor Ltd. (FSL) reported Thursday a loss for the first quarter that narrowed from last year, reflecting improved margins and sales growth. Both adjusted earnings per share and quarterly sales topped analysts' expectations. The company also provided revenue guidance for the second quarter, above Street view.

Freescale Semiconductor was formed by the divestiture of the semiconductor products segment of Motorola in 2004. In December 2006, Freescale was acquired by a consortium led by private equity firm Blackstone Group LP for the sum of $17.6 billion or at $40 per share.

The company was formerly known as Freescale Semiconductor Holdings I, Ltd. and changed its name to Freescale Semiconductor, Ltd. in April 2012.

"We continue to see solid progress on our initiatives to increase revenue and improve gross margin. 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," President and CEO Gregg Lowe said in a statement.

The Austin, Texas-based company reported a net loss of $23 million or $0.08 per share for the first quarter, narrower than $48 million or $0.19 per share in the prior-year quarter.

Results for the latest quarter include a $59 million loss associated with debt retirement and refinancing transactions, which will result in lower interest expense in future quarters.

Excluding items, adjusted net income for the quarter was $77 million or $0.27 per share, compared to adjusted net loss of $8 million or $0.03 per share in the year-ago quarter.

On average, 18 analysts polled by Thomson Reuters expected the company to report earnings of $0.24 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 15 percent to $1.13 billion from $981 million in the same quarter last year, and topped seventeen Wall Street analysts' consensus estimate of $1.09 billion.

Gross margin for the quarter improved 420 basis points to 44.8 percent from last year's 40.6 percent.

Looking ahead to the second quarter, the company expects net sales in a range of $1.14 billion to $1.20 billion, with Street currently looking for revenues of $1.09 billion.

FSL closed Thursday's regular trading session at $25.88, up $1.08 or 4.35% on a volume of 3.08 million shares. However, the stock lost $0.53 or 2.05% in after-hours trading.