Fairchild Semiconductor International Earnings: Here’s Why Investors are Not Excited Now

Fairchild Semiconductor International Inc. (NYSE:FCS) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 10.47%.

Fairchild Semiconductor International Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 92.86% to $0.01 in the quarter versus EPS of $0.14 in the year-earlier quarter.

Revenue: Rose 1.11% to $365.5 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Fairchild Semiconductor International Inc. reported adjusted EPS income of $0.01 per share. By that measure, the company missed the mean analyst estimate of $0.08. It missed the average revenue estimate of $365.66 million.

Quoting Management: “We grew sales 4 percent sequentially in the second quarter and 7 percent through the first half of 2013,” said Mark Thompson, Fairchild’s chairman and CEO. “Our high voltage product sales supporting the industrial and appliance markets were up 15 percent sequentially. We posted record quarterly sales for our products serving the automotive market. Power conversion products also recorded solid sales growth in the second quarter. We saw some incremental demand weakness from the notebook PC market and at a couple of large mobile customers that impacted Q2 sales and our backlog heading into the third quarter. We expect the weakness in notebooks to persist but have limited impact on our future results now that it accounts for less than 3 percent of total sales. Mobile sales are expected to increase in the third quarter due largely to one major customer and continued growth from our Chinese customers. Our guidance reflects some conservatism given how difficult it has been for our customers to forecast actual mobile demand.”

Key Stats (on next page)…

Revenue increased 6.5% from $343.2 million in the previous quarter. EPS increased to $0.01 in the quarter versus EPS of $-0.02 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.20 to a profit $0.18. For the current year, the average estimate has moved down from a profit of $0.56 to a profit of $0.47 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)