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Austin-based Freescale sees revenue grow, losses lessen [Austin American-Statesman :: ](Austin American-Statesman (TX) Via Acquire Media NewsEdge) April 24--Freescale Semiconductor's revenues rose 15 percent in the first quarter, as the company reported sales growth in all its major products. But because of debt obligations, the Austin-based chipmaker saw a net loss of $23 million for the quarter, compared to a net loss of $48 million for the same quarter a year ago. Freescale, which is a leading supplier of semiconductor chips for the automotive and digital network industries, employs about 5,000 people in Austin. Included in the company's quarterly net loss is $59 million of costs associated with debt refinancing transactions completed during the quarter. Freescale continues to carry a heavy debt load from its 2006 leveraged buyout. At the end of the quarter, the company reported carrying nearly $5.8 billion in long-term debt. Despite those losses, Freescale showed positive sales signs. Net sales for the first quarter of 2014 were $1.13 billion, compared to $981 million in the first quarter of 2013. "We continue to see solid progress on our initiatives to increase revenue and improve gross margin," said Gregg Lowe, Freescale's president and CEO. The sales boost is the result of a switch in research and development allocations that started almost two years ago, Lowe said. The company, which allocated about 69 percent of its research and development budget to its five core businesses two years ago, is now allocating 90 percent to those businesses. "It was a beautiful quarter, from a growth standpoint," Lowe said. Analyst Patrick Moorhead with Moor Insights & Strategy said Freescale "has done a decent job becoming more consistent by slowly growing profits to better chip away at their mountain of debt." "I wonder, though, if they would be better off spending more on getting their name out there," he said. "Over the last year, they have virtually disappeared from the public stage." For the quarter, microcontroller net sales were $223 million, compared to $177 million in the same quarter a year ago. Automotive microcontroller net sales were $304 million, compared to $254 million in the same quarter a year ago. Digital networking net sales were $249 million, compared to $202 million in the same quarter a year ago. Analog and sensor net sales were $198 million, compared to $177 million in the same quarter a year ago. RF net sales for the year were $113 million, compared to $86 million in the same quarter a year ago. The company also said Thursday that it has selected Dan Durn as senior vice president and chief financial officer, replacing current CFO Alan Campbell, who announced his plans to retire in January. Durn "is intimately aware of the dynamics of the semiconductor industry and has demonstrated leadership in driving change focused on continuous improvement," Lowe said. ___ (c)2014 Austin American-Statesman, Texas Visit Austin American-Statesman, Texas at www.statesman.com Distributed by MCT Information Services |