Fairchild Semiconductor Reduces Guidance for the Fourth Quarter of 2008
November 10 2008 - 7:30AM
Business Wire
Fairchild Semiconductor (NYSE: FCS), a leading global supplier of
high performance products that enable energy-efficiency, today
reduced its guidance for the current quarter. Revenue for Q4 2008
is now projected to be between $338 million and $360 million, a
sequential decline of 16 percent to 21 percent from the third
quarter. Gross margin is expected to be down 100 to 200 basis
points (27.9 percent to 28.9 percent) due to the lower revenue, and
the company expects to cut R&D and SG&A spend to $73 to $76
million for the quarter. Previous guidance, given as part of the
company�s Q3 2008 earnings release, was for a sequential sales
decline of 6 percent to 12 percent, flat (29.9 percent) gross
margin and R&D and SG&A spending of $80 to $83 million. �We
entered the fourth quarter needing slightly more than 10 percent
fill orders to meet our guidance,� said Mark Frey, Fairchild�s
executive vice president and CFO. �Unfortunately, in the weeks
since our Q3 earnings release we have booked virtually no net fill
and demand visibility remains very limited. While we still expect
more turns orders to be booked this quarter, the lower guidance we
are issuing today requires no additional net order fill to meet the
low end of the range.� �Currently our order rates are just keeping
up with push outs and cancellations,� added Mark Thompson,
Fairchild�s president and CEO. �Our customers and distributors are
coping with reduced orders while at the same time trying to rapidly
reduce their inventories. Going forward, we will continue to focus
on the factors we can control such as operating expenses, inventory
control, capital spending and new product development. We are
confident in our overall plan, and believe we will weather this
downturn and emerge as an even stronger company.� Policy on
Business Outlook Disclosure and Quiet Periods: It is our current
policy to update our business outlook near the beginning of each
quarter, within the press release that announces the previous
quarter�s results. We are publishing this business update as a
result of the progressively weakening order rates we have
experienced in the fourth quarter and the uncertainty in the
current economic environment. The business outlook above updates
the business outlook included in our October 16, 2008 press release
announcing third quarter results. This business update is
accessible at the Investor Relations section of our website at
http://investor.fairchildsemi.com. Toward the end of each quarter,
and until that quarter�s results are publicly announced, we observe
a �quiet period,� when the business outlook is not updated to
reflect management�s current expectations. The quiet period for the
fourth quarter of 2008 will be from December 13, 2008 until January
22, 2009 when we plan to release our fourth quarter and full year
2008 results. Except during quiet periods, the business outlook
posted on our website reflects current guidance unless and until
updated through a press release, SEC filing or other public
announcement. During quiet periods, our business outlook, as posted
on our website, announced in press releases and provided in
quarterly, annual and special reports or other filings with the
SEC, should be considered to be historical, speaking as of prior to
the quiet period only and not subject to update by the company.
During quiet periods, Fairchild Semiconductor representatives will
not comment about the business outlook of the company�s financial
results or expectations for the quarter in question. Special Note
on Forward-Looking Statements: This press release contains
forward-looking statements that are based on management�s
assumptions and expectations and involve risk and uncertainty.
Forward-looking statements usually, but do not always contain
forward-looking terminology such as �we believe,� �we expect,� or
�we anticipate,� or refer to management�s expectations about
Fairchild�s future performance. Many factors could cause actual
results to differ materially from those expressed in
forward-looking statements. Among these factors are the following:
the current uncertainty in global economic conditions, including
disruptions in the credit markets, as well as future economic
conditions; changes in demand and the aggressive pricing
environment for our products; changes in inventories at our
customers and distributors; order cancellations or reduced
bookings; technological and product development risks, including
the risks of failing to maintain the right to use some technologies
or failing to adequately protect our own intellectual property
against misappropriation or infringement; availability of
manufacturing capacity; the risk of production delays; availability
of raw materials at competitive prices; competitors� actions; loss
of key customers, including but not limited to distributors; the
inability to attract and retain key management and other employees;
changes in manufacturing yields or output; risks related to
warranty and product liability claims; risks inherent in doing
business internationally; changes in tax regulations or the
migration of profits from low tax jurisdictions to higher tax
jurisdictions; regulatory risks and significant litigation. These
and other risk factors are discussed in the company�s quarterly and
annual reports filed with the Securities and Exchange Commission
(SEC) and available at the Investor Relations section of Fairchild
Semiconductor�s web site at investor.fairchildsemi.com or the SEC�s
web site at www.sec.gov. About Fairchild Semiconductor: Fairchild
Semiconductor (NYSE: FCS) is a global leader delivering
energy-efficient power analog and power discrete solutions.
Fairchild is The Power Franchise�, providing leading-edge silicon
and packaging technologies, manufacturing strength and system
expertise for consumer, communications, industrial, portable,
computing and automotive systems. An application-driven,
solution-based semiconductor supplier, Fairchild provides online
design tools and design centers worldwide as part of its
comprehensive Global Power ResourceSM. Please contact us on the web
at www.fairchildsemi.com.
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